RURAL ACADEMY FOR MANAGEMENT STUDIES ASSIGNMENT ON

PERFORMANCE MANAGEMENT AND REWARD SYSTEM Topic: POTENTIAL APPRAISAL

SUBMITED TO V SUDARSHAN MANOJ (Faculty Member)

Date:- 12-03-2012

NIMSHAD ELAMPILAKKAT 3rd semester MBA

Potential Appraisal
In most Indian organizations, people earn promotions on the basis of their past performance. The past performance is considered a good indicator of future job success. This could be true, if the job to be played by the promote are similar. However, in actual practice, the roles that a role holder played in the past may not be the same he is expected to play if he assumes a different job after his transfer or promotion to a new position. Past performance, therefore, may not be a good indicator of the suitability of an indicator for a higher role. To overcome this inadequacy, organizations must think of a new system called potential appraisal. The objective of potential appraisal is to identify the potential of a given employee to occupy higher positions in the organizational hierarchy and undertake higher responsibilities. Potential appraisals are required to: inform employees about their future prospects; help the organization chalk out of a suitable succession plan; update training efforts from time to time; Advise employees about what they must do to improve their career prospects.

Introducing a Good Potential Appraisal System Steps to be followed while Introducing a Good Potential Appraisal System: The following are some of the steps required to be followed while introducing a potential appraisal system: Role Descriptions: Organizational roles and functions must be defined clearly. To this end, job descriptions must be prepared for each job.

Qualities needed to perform the roles: Based on job descriptions, the roles to be played by people must be Rating mechanisms: Besides listing the functions and qualities, the potential appraisal system must list mechanisms of judging the qualities of employees

FEEDBACK

Feedback describes the situation when output from an event or phenomenon in the past will influence the same event/phenomenon in the present or future. When an event is part of a chain of cause-and-effect that forms a circuit or loop, then the event is said to "feed back" into itself. Feedback is also a synonym for:

Feedback signal; the information about the initial event that is the basis for subsequent modification of the event. Feedback loop; the causal path that leads from the initial generation of the feedback signal to the subsequent modification of the event. Audio feedback; the special kind of positive feedback which occurs when a loop exists between an audio input and output.

Types of feedback

Figure 1: Ideal feedback model. The feedback is negative if B < 0 Main articles: Negative feedback and positive feedback When feedback modifies an event/phenomenon, the modification will subsequently influence the feedback signal in one of three ways:

1 - The feedback signal increases the change in input signal, leading to more modification. This is known as positive feedback. 2 - The feedback signal decreases the change in input signal, leading to less modification. This is known as negative feedback. 3 - The feedback signal does not change when the input signal changes, in which case there is no feedback. This is known as a linear system. Note that an increase or decrease of the feedback signal here refers to the magnitude relative to the input signal's absolute value, without regard to the polarity or sign of the feedback signal. For example if the input signal changes by 100 then a change in feedback signal value from +5 to +10 is a positive feedback. If the input signal changes by -100 then a change in the feedback signal from -3 to -6 is also a positive feedback. Positive feedback seeks to increase the event that caused it, such as in a nuclear chainreaction. It is also known as a self-reinforcing loop. An event influenced by positive feedback can increase or decrease its output/activation until it hits a limiting constraint. Such a constraint may be destructive, as in thermal runaway or a nuclear chain reaction. Self-reinforcing loops can be a smaller part of a larger balancing loop, especially in biological systems such as regulatory circuits. Negative feedback, which seeks to reduce the input signal that caused it, is also known as a self-correcting or balancing loop. Such loops tend to be goal-seeking, as in a thermostat which compares actual temperature with desired temperature and seeks to reduce the difference. Balancing loops are sometimes prone to hunting: an oscillation caused by an excessive or delayed negative feedback signal, resulting in over-correction where effectively the signal becomes a positive feedback. CRITICAL CRITERIA OF DEVELOPING A PA SYSTEM In order for performance appraisal information to be useful, the PA system must be able to consistently produce reliable and valid results. Measurement items in the performance

appraisal system must be designed in such a way that the results of rating are consistent regardless of the raters and the timing of the assessment. Another critical criterion in developing a PA system is the validity of the measurements. It is important to make sure that the appraisal items are really measuring the intended performance or target behavior. If they are not, the PA system encourages the wrong kind of work behaviors and produces unintended, frequently negative, organizational outcomes. For instance, if the number of traffic violation tickets issued is an item in performance appraisal of police officers, it encourages them to sit on a corner of a street and pull over as many violators as possible during heavy traffic hours. The true purpose of a police force, which is public safety, may become secondary to issuing a large number of tickets for many officers.