Improving the performance management in Techcombank

vietnam national university, HANOI
hanoi school of business








Le Xuan Hoang





Improving the performance
management in techcombank






master of business administration thesis

Hanoi - 2007
vietnam national university, HANOI
hanoi school of business





Le Xuan Hoang





Improving the performance
management in techcombank








Major: Business Administration

Code: 60 34 05



Master of business administration thesis




Supervisors:
1. DR. NGUYEN ngoc anh
2. Ha Nguyen, MBA





Hanoi – 2007

i
TABBLE OF CONTENTS
ACKNOWLEDGEMENTS i
ABSTRACT ii
TÓM TẮT iv
LIST OF FIGURES iii
INTRODUCTION 1
1. Objectives and aims 1
2. Research questions 1
3. Scope of work 1
4. Data source and processing 1

5. Methods 1
6. Significance 2
7. Limitations 2
8. Expected results 2
9. Outline of thesis 2
CHAPTER 1: THEORETICAL FOUNDATION 4
1.2. Benefits of performance appraisal 6
1.2.1. Benefits to the organization: 6
1.2.2. Benefits to supervisors 7
1.2.3. Benefits to employees 8
1.3. Performance appraisal system: 9
1.4. Performance measures criteria 11
1.5. Errors should be avoided in performance evaluation: 13
1.6. Performance appraisal methods 14
1.6.1. Attribute approaches 14
1.6.2. The behavioral approach 18
1.6.3. The results approach 21
CHAPTER 2: FINDINGS 24
2.1. Macro analysis 24

ii
2.2. Techcombank introduction 25
Figure 2-1: Some Main Figures of Techcombank 26
2.3. SWOT Analysis 29
2.3.1. Strengths 29
2.3.2. Weaknesses 31
2.3.3. Opportunities 32
2.3.4. Threats 33
2.4. Survey analysis 33
2.4.1. The model of the survey 33

2.4.2. The survey’s content 34
CHAPTER 3: RECOMMENDATIONS 68
3.1. Bank's defined target of work performance appraising 68
3. 2. Completion of job descriptions 68
3.2.1. Job descriptions: 68
3.2.2. Set up a performance appraisal criteria system: 70
3.3. Selection of appraisal methods 70
3.4. Build-up of multi-way appraisal system 71
3.5. Complete the interview of performance appraisal 72
3.6. Training provided to those who take charge of performance appraisal 73
3.7. Strengthening use of performance appraisal results to operations of human
resource work of the Bank 74
3.8 Researching and strengthening deployment of personnel rotation 75
3.9 Build-up of business' atmosphere and culture 76
3.10. Action plans 78
CONCLUSION 81
REFERENCE 82
APPENDIX A: Questionnaire 84
APPENDIX B: Job description of an accountant and requirements 88
APPENDIX C: Method of giving mark to employees’ performance appraisal 93

iii
LIST OF FIGURES

Figure 2 – 1: Some Main Figures of Techcombank 26
Figure 2 – 2: Number of seniority in Techcombank 34
Figure 2 – 3: Percent of seniority in Techcombank 35
Figure 2 – 4: Number of current title 35
Figure 2 – 7: Percent of education level 37
Figure 2 – 8: Number and percent of Reasonableness of salary in TCB 38

Figure 2 – 9: Number and percent of Fair in compensation policy 39
Figure 2 – 10: Number and percent of reward based on results of performance
39
Figure 2 – 11: Number and percent of timely praised when perform well 39
Figure 2 – 12: Number of participate in short courses 40
Figure 2 – 13: Percentage of participate in short courses 41
Figure 2 – 14: Number of participate in long courses 42
Figure 2 – 15: Percentage of participate in long courses 42
Figure 2 – 16: Number of satisfaction level with compensation policy 43
Figure 2 – 17: Percentage of satisfaction level with compensation policy 43
Figure 2 – 18: Number and percentage of clearness for making plan and
announcing to staffs 44
Figure 2 – 19: Number and percentage of work suits with capacity 45
Figure 2 – 20: Number and percentage of employees’ strengths are used and
developed 45
Figure 2 – 21: Number and percentage of encouraged and oriented to develop
career 45
Figure 2 – 22: Number and percentage of rotation through other positions 46
Figure 2 – 23: Number and percentage of challenging with higher positions 46
Figure 2 – 24: Number and percentage of sufficiently informed about human
policies 46

iv
Figure 2 – 25: Number of complain with colleagues 47
Figure 2 – 26: Percentage of complain with colleagues 48
Figure 2 – 27: Number of complain with managers 48
Figure 2 – 28: Percentage of complain with managers 49
Figure 2 – 29: Number of administration’s reaction 50
Figure 2 – 30: Percentage of administration’s reactions 50
Figure 2 – 31: Number and percentage of people like working atmosphere 51

Figure 2 – 32: Number and percentage of employees’ ideas are listened 52
Figure 2 – 33: Number and percentage of employees’ creativeness is
encouraged 52
Figure 2 – 34: Number and percentage of people feel their job is challenging,
interesting 52
Figure 2 – 35: Number of the relationship with Techcombank 53
Figure 2 – 36: Percentage of the relationship with Techcombank 54
Figure 2 – 37: Number of satisfaction with current job 54
Figure 2 – 38: Percentage of satisfaction with current job 55
Figure 2 – 39: Number of motivation to perform assignments 55
Figure 2 – 40: Percentage of motivation to perform assignments 56
Figure 2 – 41: Number of employees’ expectations 57
Figure 2 – 42: Percentage of employees’ expectations 57
Figure 2 – 43: Number of managers’ reactions 58
Figure 2 – 44: Percentage of managers’ reactions 59
Figure 2 – 45: Number of employees’ trend 60
Figure 2 – 46: Percentage of employees’ trend 60

1
INTRODUCTION
1. Objectives and aims
There are three objectives of this thesis when mentioning to performance
appraisal activities, include gathering theories related to appraising performance
(both concepts and models). A case study of Techcombank will be examined in
order to gain a Clear understanding about the process of appraising performance in
Techcombank then find out the exist issues in the process of appraising
performance in Techcombank
Finding out all the problems in the process of performance appraisal in
Techcombank, the student has some aims include: Suggest some solutions to
improve the process of appraising performance, human resource policies. If these

issues are improved, they will contribute to increase the effects of employees’
working and reinforce the loyalty of employees
2. Research questions
Two research questions are applied when examining the Techcombank’s case
study are: How does the process of appraising performance in Techcombank
deploy? And Is the process of appraising performance in Techcombank effective?
3. Scope of work
Scope of work is from 2005 to 2006 and the conducted area is departments in
head office of Techcombank.
4. Data source and processing
The data is collected from two sources: Primary (information is conducted
directly from interview and survey to find out the employees’ opinion on the current
performance appraisal of Techcombank) and Secondary (study documents related to
appraising performance activities of banking sector; evaluation reports)
5. Methods
The method will be based on researching real case study of Techcombank and
use questionnaire (Questionnaire is built based on theory, From the result of
questionnaire the student then turn back to the reality of appraising the employees’

2
performance to improve the process of Techcombank). Interview or focus group
will also be used when necessary.
6. Significance
The student hopes that, the thesis will contribute significant meanings: (i)
Study deeply about the process of appraising performance activities in
Techcombank and improve the process; (ii) Assessing the employees’ performance
activities at their true worth; (iii) Encourage and strengthen the loyalty and the
relationship between the employees and Techcombank
7. Limitations
Because the time limitation, the thesis can not avoid mistakes. Case study is

only conducted in Head Office so it cannot reflect all the opinions of
Techcombank’s employees. The survey’s results are provided by Human resource
department, therefore some sensitive information are biased, so the accuracy of
questionnaire is not absolutely accurate.
8. Expected results
Firstly, the student hope to find out the existing issues in the process of appraising
performance in Techcombank then apply the theory of human resource management
to contribute useful solutions to improve the practices of performance management
in Techcombank.
9. Outline of thesis
The thesis includes three chapters:
 Chapter 1 - Theoretical foundation: This section will summarize the theories
of performance appraisal. It will give the readers an overview of performance
activities from clearly definition to the benefits of using performance
management, the criteria used in performance appraisal as well as the
performance appraisal models and their advantages, disadvantages of using
them
 Chapter 2 - Findings: After analyzing the current position of Techcombank
(SWOT analysis), the survey’s results and the data collected form secondary

3
source, the thesis will point out the findings about the existing problems in
Techcombank from policies to practice of deploying performance appraisal.
All the problems of Techcombank will be analyzed in the aspect of
performance management.
 Chapter 3 - Recommendations: Continue to the analyzed findings from
chapter 2, this section will suggest some solutions and how to apply the
performance appraisal methods in Techcombank. The student hopes that, all
the recommendations will be useful and effective for not only Techcombank
but also for other commercial joint stock banks which have the same issues

like Techcombank.

4
CHAPTER 1: THEORETICAL FOUNDATION

Organizations that seek to gain competitive advantage through their workers
must be able to manage the behavior and results of all employees. One of the most
important challenges managers face is managing the performance of those over
whom they have authority.
(
1
)
Performance management is defined as the means through which mangers
ensure that employees’ activities and outputs are congruent with the organization’s
goals. Performance management is central to gaining competitive advantage.
(
2
)
Performance management system has three parts: defining performance,
measuring performance, and feeding back performance information.
A performance management system specifies which aspects of performance
are relevant to the organization, primarily through job analysis. It measures those
aspects of performance through performance appraisal, which is only one method
for managing employee performance. It provides feedback to employees through
performance feedback sessions so that they can adjust their performance to the
organization’s goals.
Every employee works in an organization has different background,
knowledge, attitude, motives, personal characteristics, skills, and so on which affect
their performance at work.
In order to facilitate excellence in the performance of the employees in the

organization, organization is required to identify right person for right job and
ensure their contribution to the organization’s objectives
Giving performance feedback and providing remuneration and reward based
on contribution are two methods for facilitating better performance of the
employees. Employee performance appraisal provides a basis for providing


(
1
), (2)
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.196



5
feedback and for deciding remuneration and reward for contribution and
performance

1.1. Definition of performance appraisal
Performance appraisal is a process that involves communicating to an
employee how well the employee is performing the job and involves establishing a
plan for improvement.
(
1
)
Performance appraisals are used for many purposes are wage and salary
administration, promotions or demotions, transfers, layoffs, discharges, counseling
with employees, and human resources planning.
Performance appraisal systems have three principal purposes: To improve
employee performance in the present job; to prepare employees for future

opportunities that may arise in the organization and to provide a record of employee
performance that can be used as a basis for future management decisions
(2)
Performance appraisals are handled in most organizations in one of two ways:
Informal appraisal and formal appraisal.
 Informal appraisal occurs in all organizations. Under such a system no
formal procedures, methods, or times are established for conducting
performance appraisals. For example, when a supervisor conducts
appraisals informally, the employee will be given a general impression of
how the supervisor feels about their performance. In many cases, when
employee make a mistake, such appraisals are conducted. As a result,
employee often develop negative feelings about this type of performance
appraisal
 The other way of handling performance appraisals is to have a formal
appraisal system. Under such a system, procedures, methods, and times are
established for conducting appraisals.


(1) Leslie W. Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.205
(2) Leslie W. Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.208

6
 It is important to note that, formal appraisal systems contain an informal
element. For example, general comments that a supervisor makes about an
employee’s performance are a type of informal performance appraisal.
Supervisors must realize that any comment made by a supervisor about an
employee’s performance is viewed by the employee as a form of
performance appraisal. Thus, the supervisor must use informal reviews to
reinforce good performance and discourage poor performance.

1.2. Benefits of performance appraisal
A sound performance appraisal systems does not only bring benefits for the
organization, but also for the managers and employees.
1.2.1. Benefits to the organization:
 Provides an evaluation of the organization’s human resources: In an
organization’s performance appraisal system, the managers can evaluate
the performance of employees and supervisors. Thus, the managers can
know the capacity of human resources through the results of the
performance appraisal system.
 Gives the organization a basis for making future human resources
decisions: Based on the results of performance appraisal, the managers can
give out appropriate decisions about human resources such as training,
promoting, developing, compensating, so on. More over, the results of
performance appraisal reflect the success of functional activities of human
resource department in recruiting, selecting, orienting, promoting and other
activities. Then the managers will set up plan for adjusting and developing
in future.
 Increases the potential of the organization’s present human resources
for meeting the present and future needs of the organization: the
capacity of employees and even supervisors are reflected in the results of
performance appraisals. Therefore, the human resource department can

7
easily make decisions on human resource plans like applying rotation
policy, doing training programs to enhance the skills for employees,
promoting people in higher position, carrying out special recruiting actions
to select qualified employees for meeting the needs of the organization’s
development
 Improves employees morale: The rationality and accuracy of using
appraisal tools and feedback information have the effect to the employees

in building and developing their morale, their atmosphere of working
environment and their attitude. When the employees feel that they are
appropriately evaluated, they will try their best to work more effectively
and contribute much to the organization.
1.2.2. Benefits to supervisors
 Provides the supervisor with a clearer picture of the employee
understands of what is expected to the job: Any business organization
exists to serve identified needs of the society. Employees working in the
organization are responsible for effectively serving those needs as per the
assigned responsibilities. So with specific job, employee always receive
the guidance and the job’s requirements. When comparing the employees’
results from the performance appraisal with the requirements, the
supervisors can evaluate the level of the employees’ understanding the
requirements of their job. The managers should link employee activities
with the organization’s goals.
 Gives the supervisor input into each employee’s development: There is
a widespread belief that the purpose of employee performance appraisal is
deciding salary increments and promotions. However, performance
appraisal can serve variety of organizational needs very effectively like
developing employees who are effective at their jobs. When employees are
not performing as well as they should, performance management seeks to
improve their performance. The feedback given during a performance

8
evaluation process often pinpoints the employee’s weaknesses. Ideally, the
performance management system identifies not only the aspects of the
employee’s performance that are deficient but also the causes of these
deficiencies. Then the supervisor can help the employee make an
appropriate development plan.
 Improves the productivity of morale of the supervisor’s employees:

When the performance appraisal is conducted in fair and transparent
manner, employee will feel satisfied. They know that if they work morally,
the supervisor will evaluate them appropriately through a fair assessment.
The accuracy of employee’s performance appraisal is reflected in the result
help them to identify opportunities for improvement and it motivate the
productivity of employees’ morale
 Helps the supervisor identify capable replacements for higher-level
jobs within the supervisor’s work unit: When conducting performance
appraisal, the supervisors’ duties of supervisor are not only assess the
employees but also assess other supervisors. The results can be used in the
supervisors’ s work unit for replacements for higher level jobs.
1.2.3. Benefits to employees
 Allows the employee to present ideas for improvement: The
performance appraisal is conducted in fair and transparent manner will
provide a bilateral communication between the supervisor (appraisor) and
the employee (appraisee). The feedback given during a performance
evaluation process often pinpoints the employee’s weaknesses, the level of
reasonability of supervisor’s remark. It makes the people in different
position in an organization become closer. The bilateral communication
during the performance appraisal makes everything clearer so employee
will actively find out the ideas to improve both the system and themselves.
 Provides the employees with an opportunity to change his or her
behavior: The performance appraisal helps employees themselves evaluate

9
their capacity, realize their importance level in organization, identify
opportunities for improvement. To achieve higher promotions, the
performance appraisal helps employees find what requirements they need
to improve such as: knowledge and experience, skills and morale, working
attitude and contribution to the organization, so on. A fair and transparent

appraisal with the advice of supervisors will motivate employees try their
best to reach the future opportunities.
 Lets the employee know how the supervisor feels about his or her
performance: During the performance appraisal, the employee will have
chance to discuss with the supervisor and may recognize the feeling of the
supervisor about employee’s work. At the end of appraisal process, the
supervisor will give the result to the employee includes the supervisor’
comments and advice. The feeling of the supervisor about employee’s
work makes the employee feel that their contribution is acknowledged, the
fairness in evaluating performance between members in organization is
equal (Each employee will receive different comment from the supervisor)
so employee will be encouraged to perform better in their work.

1.3. Performance appraisal system:
In order to do appraising work, the organization need to set up a performance
appraisal system includes three fundamental elements:
 The requirements and criteria for performance appraisal: The
appraisor use several evaluating methods to measure the employees’
performance by comparing the result with the expected result; The
requirements to do the job is a criteria system to perform the work includes
both qualitative and quantitative requirements; The requirements need to
built based on objectivity, reasonability and they can reflect which
behaviors are necessary to perform the work well

10
 Measure the employee’s performance based on standard criteria: It is
a process and in this step, the manager need to have administrative
evaluations whether the employee’s performance is good or not. The
process of employee appraisal begins with formal commnunication of
appraisal framework and program to the employees. Deciding operating

goals for each of the employee is also a step in the process of appraisal as
the appraisal is conducted with respect to set operating goals. The process
of performance appraisal includes 4 steps:
(i) Pre interview preparation: Appraiser should collect the information
for the appraisal period in respect of the appraisee: assigned job
responsibilities; specific assignments; programs participated;
projects handled; events participated; nature of relationships
established with seniors, colleagues, juniors, partners and
customers; nature of interactions with seniors, colleagues, juniors,
partners and customers; achievements and recognitions; failures and
punishments; issues arisen or handled; complaints received
(ii) Familiarization with operating situation and environment: In the
beginning of the appraisal interview, the appraiser should clearly
and formally state the objectives of the appraisal and explain the
process. The appraiser initiate the conversation to create confidence
in the mind of the appraisee. Before beginning of the actual
appraisal the appraiser ask the questions to understand the working
conditions and environment being encountered by the appraisee for
example: What is the most difficult operating problem you have
faced? Which clients/ customers/ business partner/ executives you
find most difficult to handle? Where do you think organization
should concentrate for improvements? Answers to these and similar
questions reflect the information on the working environment of the

11
employees. This information is useful to weigh the gathered
evidence
(iii) Evidence gathering: After the appraiser has clear idea of the
appraisee’s operating environment, appraiser shall begin the formal
appraisal by gathering the evidence needed for evaluating the

employee’s performance
(iv) Evidence grading: Comparing the performance of employee in the
fact with the expected result based on the requirements and standard
criteria, the appraiser will conclude how well the employee has
done in their working performance.
Measure the performance is the centre of performance appraisal.
 Personal feedback and reporting: appraisers discuss the appraisal ratings
and reasons for the rating with individual employees. Appraisers also
record views of the employees in respect of the appraisal. The appraiser
should also discuss the steps that an individual employee can take to
improve their performance. Then the organization establishes proper
reporting on the outcome of appraisal exercise for the purpose of future
analysis and improvements in the system.

1.4. Performance measures criteria
 Strategic congruence: Strategic congruence: is the extent to which the
performance management system elicits job performance that is congruent
with the organization’s strategy, goals, and culture
(
1
)
. Strategic congruence
emphasizes the need for the performance management system to provide
guidance so that employees can contribute to the organization’s success.
Most companies’ appraisal systems remain constant over a long period of
time and through a variety of strategic emphases. However, when a
company’s strategy changes, its employees’ behavior needs to change, too.


(

1
),
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.200

12
 Validity: Validity is the extent to which the performance measure assesses
all the relevant and only the relevant aspects of performance. This is often
referred to as content validity. For a performance measure to be valid, it
must not be deficient or contaminated
(
1
)
. Validity is concerned with
maximizing the overlap between actual job performance and the measure
of job performance. A performance measure is deficient if it does not
measure all aspects of performance. A contaminated measure evaluates
irrelevant aspects of performance or aspects that are not job related. The
performance measure should seek to minimize contamination, but its
complete elimination is seldom possible.
 Reliability: Reliability refers to the consistency of the performance
measure. One important type of reliability is interrater reliability - the
consistency among the individuals who evaluate the employee’s
performance
(
2
)
. A performance measure has interrater reliability if two
individuals give the same evaluations of a person’s job performance.
Evidence seems to indicate that most subjective supervisory measures of
job performance exhibit low reliability. With some measures, the extent to

which all the items rated are internally consistent is important (internal
consistency reliability). In addition, the measure should be reliable over
time (test-retest reliability). A measure that results in drastically different
ratings depending on the time at which the measures are taken lacks test-
retest reliability
 Acceptability: Acceptability refers to whether the people who use the
performance measure accept it
(3)
. Many elaborate performance measures
are extremely valid and reliable, but they consume so much of managers’
time that they refuse to use it. A system that is not accepted is almost
worse than no measure at all. This points to the need to involve both



(1), (2), (3)
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.201

13
managers and employees in the development of performance measures.
Research has found that this increases the acceptability of the system.
 Specificity: is the extent to which the performance measure gives specific
guidance to employees about what is expected of them and how they can
meet these expectations. Specificity is relevant to both the strategic and
developmental purposes of performance management
(
1
)
. If a measure does
not specify what an employee must do to help the company achieve its

strategic goals, it becomes difficult for it to achieve its strategic purpose.
Additionally, if the measure fails to point out an employee’s performance
problems, it is almost impossible for the employee to correct his or her
performance.

1.5. Errors should be avoided in performance evaluation:
 Error of favoritism: This happens when the supervisor favor some body
than others. It will make the result of the performance evaluation incorrect.
 Error of average tendency: The rater does not want to take offence or
displease others then he has tendency to evaluate employees a little higher
than average level.
 Error of extreme: The supervisor prove to be so strict (manager gives low
ratings to all employees) or so easy (rater assigns high ratings to all
employees) in the process of performance evaluation. These error make
difficult to distinguish among employees rated by the same rater and create
problem in comparing the performance of individuals rated by different
raters.
 Error of preconception caused by culture customs: The supervisor’s
opinion may be erroneous because of the supervisor’s culture habits


(
1
)
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.201

14
 Error of prejudice: The supervisor may dislike a group or a working class
then the evaluation about their performance can be subjective and
incorrect.

 Error of the latest event’s influence: The supervisor’s opinion can be
affected by employees’ behaviors, attitudes have just occurred. This occurs
when one positive performance aspect causes the rater to rate all other
aspects of performance positively and in contrast, one negative aspect
results in the rater assigning low ratings to all the other aspects.

1.6. Performance appraisal methods
1.6.1. Attribute approaches
The attribute approach to performance management focuses on the extend to
which individuals have certain attributes (characteristics or traits) believed to be
desirable for the company’s success. The attribute approaches are used to mainly
measure characteristics an employee has which are important for evaluating
performance. The techniques that use this approach tend to define a set of traits such
as initiative, leadership, and competitiveness and evaluate individuals on them.
 Graphic rating scales: The most common form that the attribute approach
to performance management takes is the graphic rating scale. Graphic
rating scales can provide the rater with a number of different points or with
a continuum along with the rater simply places a check mark. To use this
method, there are two important steps includes choosing the traits and
measuring the traits. The chosen traits are typically in two types: directly
related to job and indirectly related to job. With the graphic rating scale,
the supervisor is asked to evaluate an individual on such factors as
quantity, quality, initiative, dependability, cooperativeness and quality of
work. Using this approach, judgments about performance are recorded on a
scale. The scale is divided into categories.
Using graphic rating scales have some advantages such as:

15
(i) Easy to understand
(ii) Comparatively simple to establish

(iii) Simple to use
(iv) Relatively inexpensive to develop
(v) Give the same information on all employees
(vi) Quantify the number of employee’ performance
However, this method contains some disadvantages like:
(i) The specific characteristics of each job may be ignored
(ii) This method is easily impacted by subjective errors. They can lead
to incorrect performance evaluation. (bias opinion, prejudice,
preconception, average tendency, leniency, so on)
(iii) Graphic rating scale method can generate problems if choosen
criteria are not suitable
(iv) Standards are may be unclear
(v) One of the biggest problems with graphic rating scale is that many
supervisors have a tendency to evaluate everyone a little above
average
(
1
)
.
 Essay method: This method requires the supervisor to write a series of
statements about an employee’s performance, strengths and weaknesses,
potential for promotion as well as the rater’s suggestions,
recommendations for employee’s work. The essay can be written
according to different subjects such as: behavior on employee’s work, the
demand for training, opportunities for development
The advantages of this method include:
(i) Simple to use
(ii) Help to provide opportunity to point out the characteristics of
employee

(
1
)
Leslie W. Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.210

16
(iii) This method provide detail and useful feedback for employee (point
out strengths, weaknesses)
(iv) The employees can gain the right working orientation from the
suggestion and recommendation of their supervisor
The disadvantages of this method include:
(i) It is difficult to use narrative information in human resource
decision
(ii) The accuracy of narrative information much depends on the rater’s
writing ability
(iii) The length and the content of the of the written statement can vary
considerably from supervisor to supervisor
(
1
)

(iv) It is difficult to compare essay appraisals made by different
supervisors
(v) Comparing essay evaluations might be difficult because no common
criteria exist
 Check list: This method requires the supervisor design a list of statement
which describes about the employees’ behavior, attitude can occur during
their work. With the check list, the supervisor does not actually evaluate
but merely records performance. The supervisor checks yes or no

responses on a series of questions concerning the employee’s performance.
There are some advantages of check list method:
(i) It is easy to use
(ii) The scoring key for the check list is usually kept by the human
resources department, which computes the relative rating of the
employee.
(iii) Individuals with high scores are rated as better employees than those
with low scores
(iv) This method avoid average tendency or leniency


(
1
)
Leslie W. Rue and Lloyd L.Byars, “Supervision: key link to productivity”, Fifth edition 1996, p.210

17
The disadvantages exist in this method are:
(i) Supervisor are generally not aware of the values associated with
each question
(ii) The questions can be figured out the positive and negative aspects,
so bias can be introduced into the answers
(iii) Assembling the question is a difficult job
(iv) A different set of questions must be assembled for most job
categories
(v) General narrative statement can not reflect specific characteristics of
each job
Here is an example illustrated for check list method:
Full name of
employee

Title
Full name of rater
Department

Date
…………
Having Team work spirit
…………
Keeping the working place clean and tidy
…………
Finishing the work on time
…………
Learning new things quickly
…………
Unwilling to work overtime
…………
Reluctant to receive critism
…………
Having a tendency to get into unnecessary conflicts with
other people
…………
Ability to acquire knowledge and to use it in concrete
situations
 Evaluating the attribute approach:
Managers need to be aware that attribute based performance methods are the
most popular methods in organizations. They are quite easy to develop and are
generalizable across a variety of jobs, strategies, and organizations. In addition, if

18
much attention is devoted to identifying those attributes relevant to job performance

and carefully defining them on the rating instrument, they can be as reliable and
valid as more elaborate measurement techniques
(
1
)
.
These techniques fall short on several of the criteria for effective performance
management. There is usually little strategic congruence between the techniques
and the company’s strategy. These methods usually have very vague performance
standards that are open to different interpretations by different raters.
Virtually none of these techniques provides any specific guidance on how an
employee can support the company’s goals or on what to do to correct performance
deficiencies. In addition, when the raters give feedback, these techniques tend to
elicit defensiveness from employees.
1.6.2. The behavioral approach
The behavioral approach to performance management attempts to define the
behaviors an employee must exhibit to be effective in the job. The various
techniques define those behaviors then require managers to assess the extent to
which employees exhibit them
(
2
)
. Behavioral approaches are excellent source of
information for employee development. There are some common methods includes:
 Critical incident method: The critical incident approach requires
managers to keep a record of specific examples of effective and ineffective
performance on the part of each employee.When these actions significantly
affects the department’s effectively both positive and negative, the
managers will record it. The employee is then evaluated based on actual
behavior.

The principal advantages of this method are:
(i) Provides the employee with an opportunity to establish an
understanding of the behavior that the superior is seeking


(
1
)
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.207
(
2
)
Noe Hollenbeck Gerhart Wright. “Human resource management”, Second edition 1996, p.209

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(ii) The incidents are used to give specific feedback to employees about
what they do well and what they do poorly, and they can be tied to
the company’s strategy by focusing on incidents that best support
that strategy.
(iii) Forces supervisor to evaluate subordinates on an ongoing basis
The disadvantages which this method used to meet are:
(i) The supervisor must record pertinent incidents as they occur. This
can be time consuming and burdensome
(ii) The strong tendency to record or stress primary negative incidents
(iii) Many managers resist having to keep a daily or weekly log of their
employees’ behavior.
(iv) It is also often difficult to make comparisons among employees,
since each incident is specific to that individual.
(v) The employees may feel unsatisfactory when knowing the
supervisor record their bad behavior

 Behaviorally anchored rating scales (BARS): This method is combined
the tradition rating scale and critical incident method. To develop BARS,
one first gathers a large number of critical incidents that represent effective
and ineffective performance on the job. These incidents are classified into
performance dimensions, and the ones that experts agree clearly represent
a particular level of performance are used as behavioral examples to guide
the rater.
The advantages include:
(i) More accurate than other traditional rating scale
(ii) The traits are chosen more carefully
(iii) Create the unity and consistency between supervisors because this
method evaluates observable behavior rather than raters’ subjective
perception