Professional Documents
Culture Documents
INTRODUCTION:
Rahul felt let down by his manager end of the year. He thought he had given his best and
given innumerable innovative ideas that benefited the company but end of the year he was
simply rated as Average by his boss. What else could he have done to get a A+ rating? He
felt demotivated and contemplated quitting his job. He could not accept that he can be a
victim of the so called "bell curve".
The above is not an exception. Rahul as a character represents a type. There are thousands
of Rahuls who might be wandering for the cup of teas they deserve. "Where do they stand
in their respective designations? They might be toiling both day in and day out with the
hope that their dream would turn reality. But in many cases, the gap in between exists as
usual. The reasons could be rater's bias or faulty performance management system or role
ambiguity etc. A sound performance management system is very systematic and
transparent which eliminates all such problems, but ensures that employees' performance is
properly aligned with the strategic aim of the organization.
BASIC CONCEPTS
The concept of employees' appraisal is not new though new approaches and methods have
been experimented and successfully employed for effective appraisal over the period of
time. During global economic downturn, employees' performance appraisal has become
stringent to segment talent from the poor performance as in case of the whiff from the
wheat. So there are certain situational factors to determine to what extent the quality and
quantity of employees' performance will be rewarded. Many managers take the integrated
nature of the process of setting goals, training employees, and then appraising and
rewarding them more sincerely today than the earlier. They call this total integrated process
performance management. We may define performance management as a process that
consolidates goal setting, performance appraisal and development into a single, common
system, the aim of which is to ensure that the employee's performance is aligned with the
company's strategic aims. Performance management includes the practices through which
the manager defines the employee's goals and work, develops the employee's capabilities,
and evaluates and rewards the persons' effort all within the framework of how the
employee's performance should contribute to accomplish the company's goals.
RESEARCHES
Some studies have already been conducted to critically examine the various needs and uses
of employees' appraisal. An extensive study by The Conference Board revealed that
employees' appraisal has the following objectives on the priority basis:
1. Management development,
2. Performance appraisal,
3. Performance improvement,
4. Compensation,
5. Potential identification,
6. Feedback,
7. Work-force planning and
8. Communication
However, when respondents were asked how the companies used appraisals, the ranking
differed and showed the following results:
The differences between the stated objectives of appraisals and the way they were used
may be an important reason for the employees' grievances with appraisals that was
indicated by some of the personnel managers participating on this study. Indeed, the
objectives and uses of appraisals have a different orientation. In determining compensation,
or often even in evaluating performance, superiors assume the role of judges. In contrast,
when the aim is to develop subordinates, managers need to be counselors, helpers, and
teachers.
Some of the best-known studies on performance appraisals were done at the General
Electric Company. The findings of the initial study revealed that
(5) Coaching should be done on a day-to-day basis rather than once a year.
(7) Meetings with the primary purpose of improving performance should not be conducted
at the same time that salary or promotion is being considered, and
In light of the findings, General Electric developed a new appraisal program called Work
Planning and Review (WP&R). This new approach emphasized frequent discussions of
performance without summary ratings. Moreover, salary actions were discussed at separate
meetings. Finally, problem solving and joint objective setting were emphasized. The
experience at General Electrical suggests that the two purposes of performance appraisal
should be separated because if the appraisal is used as the basis for salary action, the
superior assumes the role of a judge, while in the attempt to motivate employees the
manager takes the role of a coach. It is through recognizing the split roles in performance
appraisal and by setting specific goals mutually agreed upon by the superior and the
subordinates that productivity can be improved.
Performance management is Futuristic, i.e. how to plan, strategize, organize, ensure and
extract the desired performance in the coming year or in near future. Performance
Management consists of following mechanism.
Performance Benchmarking
Performance Indicators / KRAs
Performance Requirements
Performance Planning
Performance Policy
Performance Agreement/Contract
Performance Improvement Plan (PIP)
Reward & Award Mechanism
Performance Appraisal System
Performance Benchmarking
Performance Indicators
Proper performance strategies can be worked out once performance goals have been clearly
set. Performance strategies must prioritize on areas, factors that reflect benchmarked
Performance, i.e. the Key Performance Indicators, or Key Result Areas (KRA). These
indicators have to be clearly explained to each department, team and individual so
everybody sees clearly what is expected of him or her.
Performance Requirements
Performance strategies may also define requisite resources both human and non-human;
compare these with the current available resources in terms of existing manpower/skills
available, competencies available in the organization and their current proficiency levels,
And find the gaps in between and thereby formulating strategies to bridge the resources
gap within the requisite time frame for the same, so that the business enterprise has the
adequate resources at the earliest to extract desired performance objectives.
Performance Planning
Once performance requirements have been identified, the business enterprise or the HR
department of the business enterprise can plan performance extraction in terms of the
following:
The HR department has to identify and understand whether current job profiles, roles
are consistent to extract desired performance. In case of existence of role conflict or
need to realign or redefine certain job profiles or positions, work and people have to
be reengineered and job profile has to be properly structured in each function
(technical, frontline, operational, support functions) that enables the job holder to
give expected results as per KRAs. Over and above, there should be clear division of
labor to ensure that each employee has enough workload (avoid overloading or
under loading) so that performance doesn't get stressed and stretched. Optimum
level of employee engagement is required.
Manpower planning is absolutely imperative at this stage. A thorough analysis of
existing manpower structure has to be conducted , desired manpower has to be
estimated , gaps have to discovered and strategies to build desired manpower have
to be formulated and implemented whether through internal movements or external
hiring, or building future/buffer manpower by taking some portion of Trainees,
providing for attritions etc.
The organization must ensure that it has the right infrastructure resources like
required technology, tools & equipments, facilities, infrastructure etc. that facilitates
performance without any disturbances to deliver requisite performance.
Also performance extraction can be phased out to simplify the delivery of results
where say in a first quarter we should be able to achieve X, in second quarter Y and
in the last two quarters Z,A,B,C etc.
Performance Policy
Right Policy Framework is also a key to make out company's performance philosophy,
performance expectations and the manner in which performance has to be delivered. A
detailed Performance Management Policy needs to be defined which outlines company's
performance framework, time of appraisal, measurement and assessment methodologies,
rewarding and awarding mechanisms, and performance improvement facilities etc.
Performance Agreement
Once performance goals and objectives have been planned and agreed upon, the next thing
could be how the organization or the HR department ensures that goals or targets are
achieved. Here comes the real HR challenge and comprehensive plan to improve and create
difference in performance levels.
Here the employees are expected to raise their performance from X level to Y level as per
our business strategies. Gaps in human resources and the current proficiency level have
already been identified. In order to improve employee productivity we need to fill the gaps
in following ways:
It is very important to link high performance with efficient rewards mechanism or system in
the organization. However, we should know golden rules of rewarding:
What to Reward / Punish – The organization must cherish, promote and reward
on the priority basis certain behaviors and achievements that are desirable to
accomplish the organizational goals. Other things which are not in line with
organization and performance objectives can be given second priority.
When to Reward – It is very important to reward employee instantly when he
achieves the results or at least recognize his endeavor; delivery of rewards may
come later. It is not good to reward the employee after 6 or 12 months in the next
appraisal cycle as it renders no meaning or value to his achievement.
How to Reward – Some like it in public, some in private. Each one has his own
likings about how he should be recognized and rewarded. Cash, Kind, Stocks, Profits,
Promotions, Relocations etc. The list could be endless.
PM system must have a robust and clear evaluation or assessment methodologies in place.
Certain deliverables are quantitatively assessable; some are not, some need to be just
observed and some needs to be evaluated against specific standard etc. The evaluation or
appraisal system should have good rating-weighing mechanism, which quantifies
performance, in both absolute and subjective terms. Further the appraisal system should be
able to capture overall growth and performance of an individual in terms of his skills,
knowledge, and personality and future potential etc. so that a concrete, motivating and
constructive feedback can be extracted rather than criticizing employees.
Goals evaluation: Any appraisal system should document previous year's goals and
objectives and their status whether they are achieved, not achieved, still in process
etc.
Deliverables Achievement: Current performance should be evaluated using good
rating system and weighing mechanism. For example, each deliverable agreed in the
Performance Contract should be rated on the scale that could be either 0 – 5 or 10
etc. 0 means not achieved and 5 or 10 could mean over achieved. Further each
deliverable should be given due weightage in terms of its priority, criticality and
importance. For example total weightage of all deliverables is 20, and each
deliverable can be given weightage out of 20 so that total of all weights given to
each deliverable sums up to 20. The multiplication of each deliverable and weight
assigned to it gives a final score of achievement.
Competencies: Appraisal System should also include Competencies evaluation and
rating. Competencies can be Managerial, Behavioral, Technical, Functional, etc.
Competency rating is very complex and should be done independently along with
Competency Mapping program. However following rules regarding competencies
should be kept in mind.
For example, we cannot say, Leadership Skill competency is rated 3 out of 5. It will
always be either between 3 to 3.50 or 4 to 4.25 or 1.50 to 2.25. While defining
competency proficiencies these rating ranges can be appropriately labeled such as
Leadership Skill between 3 – 3.50 is considered to be good, but need improvement.
Rating between 4 to 4.50 can be said excellent, and needs to be kept consistent, or
rating between 2.00 to 2.50 needs immediate training program. It is also possible
that ratings may fall and rise periodically because behaviors are not always constant;
they change, improve or decline.
A competency alone does not guarantee performance and there is no direct link
between competencies and performance. Performance is more of a function of Skills
and Attitude. Hence along with competencies job related functional/technical skills
are major drivers, which enables a person to perform. Also each competency can
further be weighted as done in deliverables to indicate prioritized competencies and
consolidated competency scores can be obtained.
CONCLUSION:
Performance Appraisal is essentially a historic activity. It is an assessment of what has
already been done in the past. It cannot be changed though can be commented. In addition
to it, performance management has future implication. This is the major difference in
Performance Management and Performance Appraisals.
To ensure that appraisal is not just seen as an annual ritual to be got over as quickly as
possible it is necessary to emphasis the continuing nature of the process on briefing and
training. Performance appraisal should not be imposed on managers as something special
they have to do. It should be treated as a natural process which all managers should carry
out.
Performance appraisals are an integral part of every organization and if they are properly
developed and implemented, they can help the organization achieve its goals by developing
productive employees.