Food Services Management

# Yearly Performance Appraisal,Wages,Employee salary and performance appraisal, Methods of Appraisal, Wages – Types of Wages, Determination of wages and salary

## Performance Appraisal Wages

A good manager in a food service establishment keeps his eye on his staff performance and appraises continuously using good word, or a reprimand. Performance appraisal is the process of assessing the performance and progress of an employee, in a systematic way.

Appraisal helps the supervisors to chalk out the promotion programme, decide compensation packages for employees help them to frame training policies and programmes, understand the validity and importance of the selection procedure ensure effective communication and also serves as a motivation tool.

## Methods of Appraisal

### 1. Straight Ranking Method

It is the oldest and simplest method of performance appraisal. Here the ranking of man in a work group is done against that of another. Persons are tested in order of merit and placed in a simple grouping.

### 2. Paired comparison Method

Here, each employee is compared with all the other persons in group one at a time. The number of times each individual is compared with another is tailed on a piece of paper. These numbers yield to rank order of the entire group. For E.g.: if there are five persons to be compared, then A’s performance is compared to B’s and a decision is arrived at as to whose is better. Then A compared to B, C, D and E with each other. Thus, one arrives at the decisions, determined by the formulas:

N (N-1)/2

Where N represents the number of persons to be compared. The results are tabulated and a rank is assigned to each individual. The method is not suitable when a group is large, as a number of judgments become excessively large.

The rater considers certain features and marks them according to scale. The selected features may be analytical ability, cooperativeness, dependability, self expression, job knowledge and leadership. They may be:

☆Outstanding

☆Very good

☆Good / average

☆Fair Poor

The actual performance of an employee is compared with these grades and he is finally allotted one grade.

## Wages

The basic purpose of wage is to establish and maintain an equitable structure for personnel working in an organization. From the worker’s view it is take home pay received for the labour performed. Wages in the widest sense mean any economic compensation paid by the employer to his workers for the services rendered by them. T hey are composed of two parts – the basic wage and other allowances. The basic wage is the remuneration, by way of basic salary and allowances, which is paid or payable to an employee in terms of his contract of employment for the work done by him. The allowances on the other hand are paid in addition to the basic wage to maintain the value of basic wages over a period of time. Such allowances include holiday pay, overtime pay, and bonus and social security benefits. In this past, food service like other service organizations, have tended to offer an annual wage rate below the necessary for fair standard of living. This situation has improved as policies on wages have been adopted.

a. Types of Wages

The three types of wages are

### i. Time rate

This is the oldest and the most common method of fixing wages. Under this system, workers are paid according to the work done during a certain period of time, at the rate of so much per hour, per day, per week, per fortnight or per month or any fixed period of time.

### ii. Piece rate

Under this system, workers are paid according to the amount of work done or the number of units completed, the rate of each unit being settled in advance, irrespective of the time taken to do task.

### iii. Balance or Debt Method

This is a combination of time and piece rates. The worker is guaranteed an hourly or day-rate with an alternative piece rate. If the earnings of a worker calculated at the piece rate exceed the amount which he/she would have earned if paid on time basis, he/she gets credit for the balance, i.e., the excess piece rate earnings over the time rate earnings.

If his/her piece rate earnings are less than time rate earnings, the question of excess payment does not arise. Where piece rate earnings are less than time rate earnings, he/she is paid on this basis of the time rate, but the excess which he / she paid is carried forward as a debt against him/her to be recovered from any future balance of piece work earnings or over time work earnings. This system presupposes the fixation of time and piece rates on a scientific basis.

b. Determination of wages and salary

The five factors such as Cost of living, Productivity, Prevailing wages rates, Ability to pay and Attraction and Retention of employees have to be noted on the formulation of wages/salary levels.

No food service organization can function without human resources. Getting the right employee for the right job, providing the required training and consistently motivating him/her with provision of standard remunerations is a requisite for an effective management.