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com

INDEX

Sr. #
1 2 ' ) + . 0 / 11 11 12 1' $ntro%&ction

Particular
Performance Management & Appraisal "lossar# erms & !efinitions &

Pg. #
1 2 ' ) . / 11 11 1' 1) 1+ 1-

P&rpose (f Performance Appraisals *enefits (f Performance Appraisals ,hallenges (f Performance Appraisals Process (f Performance Appraisals ra%itional Metho%s (f Performance Appraisals Mo%ern Metho%s (f Performance Appraisals '-1 !egrees Performance Appraisals Management *# (bjectives Assessment ,entres ,oncl&sion *ibliograph#

PERFORMANCE MANAGEMENT & APPRAISAL TERMS & DEFINITIONS & GLOSSARY

$t2s important to &n%erstan% the vario&s terms an% metho%s &se% in performance management an% appraisals. Most of these aren2t %iffic&lt to &n%erstan%, b&t people often get conf&se% abo&t the meanings. Docum !tatio!3 he process of creating a paper trail to recor% %ata s&ch as %isc&ssions ha% 4ith emplo#ee, res&lts of those %isc&ssions, both s&pervisor an% emplo#ee comments, agreements bet4een the t4o. O"# cti$ % or R %ult%3 5tatements of 4hat an emplo#ee is s&ppose% to achieve. O!goi!g P r&orma!c Commu!icatio! 3 ,omm&nication bet4een manager an% emplo#ee all thro&gho&t the #ear to ens&re that problems are i%entifie% earl#, an% so there are N( 56PRPR$575 %&ring the performance appraisal. P r&orma!c R $i ' 3 6s&all# refers to a meeting to revie4 an% eval&ate performance, involving s&pervisor an% emplo#ee. (ften %one once a #ear, b&t to be effective performance revie4s, or at least informal meetings to %isc&ss performance sho&l% be &n%erta8en at least ever# fe4 months. P r&orma!c A((rai%al 3 he reg&lar 9&s&al ann&al: process 4here an emplo#ees performance for the #ear is assesse% b# manager an%;or emplo#ee. $t is onl# one part of the performance management approach. 6s&all# means the same as <performance revie4<. P r&orma!c Diag!o%i% ) (ften performance problems are a res&lt of a n&mber of factors, not j&st the fa&lt of the emplo#ee. P r&orma!c Ma!ag m !t 3 he larger process of %efining 4hat emplo#ees sho&l% be %oing, ongoing comm&nication %&ring the #ear, lin8ing of in%ivi%&al performance to organization nee%s, an% the eval&ating of appraising of performance. P r&orma!c Pla!!i!g 3 he process of comm&nication bet4een manager an% emplo#ee that res&lts in M6 6A= 6N!7R5 AN!$N" of 4hat the emplo#ee is to be %oing %&ring the ne>t perio% of time. (ften incl&%es setting objectives an% stan%ar%s of performance. Progr %%i$ Di%ci(li! 3 he process of a%%ressing performance %iffic&lties b# first tr#ing to help, then setting &p increasingl# strong conse?&ences for fail&re to reach the %esire% levels of performance. Ra!*i!g Scal % 3 A 4a# of eval&ating staff b# comparing them to each other, so there is a best, a secon% best, an% so on. his is R7A= 57R$(65 R(6*=7, an% almost al4a#s %estr&ctive. Sta!+ar+% o& P r&orma!c 3 M&t&all# agree% &pon criteria &se% to %escribe ho4 @7== an emplo#ee m&st perform, 4ritten to re%&ce s&bjective j&%gement.

INTROD,CTION
Managing emplo#ee performance is an integral part of the 4or8 that all managers an% rating officials perform thro&gho&t the #ear. $t is as important as managing financial reso&rces an% program o&tcomes beca&se emplo#ee performance or the lac8 thereof, has a profo&n% effect on both the financial an% program components of an# organization. he !epartment of the $nteriorAs performance management polic# is %esigne% to %oc&ment the e>pectations of in%ivi%&al an% organizational performance, provi%e a meaningf&l process b# 4hich emplo#ees can be re4ar%e% for note4orth# contrib&tions to the organization, an% provi%e a mechanism to improve in%ivi%&al;organizational performance as necessar#. o accomplish these objectives, managers nee% to i%entif# organizational goals to be accomplishe%, comm&nicate in%ivi%&al an% organizational goals to emplo#ees that s&pport the overall strategic mission an% goals of the !epartment, monitor an% eval&ate emplo#ee performance, an% &se performance as a basis for appropriate personnel actions, incl&%ing re4ar%ing note4orth# performance an% ta8ing action to improve less than s&ccessf&l performance. he (ffice of Personnel Management %efines performance management as the s#stematic process of3 1 2 ' ) + B (la!!i!g 4or8 an% setting e>pectations B contin&all# mo!itori!g performance B + $ lo(i!g the capacit# to perform B perio%icall# rati!g performance in a s&mmar# fashionC an% B r 'ar+i!g goo% performance

P,RPOSE OF PERFORMANCE APPRAISAL

Performance Appraisal is being practice% in /1D of the organisations 4orl%4i%e. 5elfEappraisal an% potential appraisal also form a part of the performance appraisal processes.

o revie4 the performance of the emplo#ees over a given perio% of time. o j&%ge the gap bet4een the act&al an% the %esire% performance. o help the management in e>ercising organizational control. Felps to strengthen the relationship an% comm&nication bet4een s&perior G s&bor%inates an% management G emplo#ees. o %iagnose the strengths an% 4ea8nesses of the in%ivi%&als so as to i%entif# the training an% %evelopment nee%s of the f&t&re. o provi%e fee%bac8 to the emplo#ees regar%ing their past performance. Provi%e information to assist in the other personal %ecisions in the organization. Provi%e clarit# of the e>pectations an% responsibilities of the f&nctions to be performe% b# the emplo#ees. o j&%ge the effectiveness of the other h&man reso&rce f&nctions of the organization s&ch as recr&itment, selection, training an% %evelopment. o re%&ce the grievances of the emplo#ees.

he most significant reasons of &sing Performance appraisal are3

Ma8ing pa#roll an% compensation %ecisions G 01D raining an% %evelopment nee%s G .1D $%entif#ing the gaps in %esire% an% act&al performance an% its ca&se G .-D !eci%ing f&t&re goals an% co&rse of action G )2D Promotions, %emotions an% transfers G )/D (ther p&rposes G -D 9incl&%ing job anal#sis an% provi%ing s&perior s&pport, assistance an% co&nseling:

-ENEFITS OF PERFORMANCE APPRAISAL

Perhaps the most significant benefit of appraisal is that, in the r&sh an% b&stle of %ail# 4or8ing life, it offers a rare chance for a s&pervisor an% s&bor%inate to have <time o&t< for a oneEonEone %isc&ssion of important 4or8 iss&es that might not other4ise be a%%resse%. Almost &niversall#, 4here performance appraisal is con%&cte% properl#, both s&pervisors an% s&bor%inates have reporte% the e>perience as beneficial an% positive. Appraisal offers a val&able opport&nit# to foc&s on 4or8 activities an% goals, to i%entif# an% correct e>isting problems, an% to enco&rage better f&t&re performance. h&s the performance of the 4hole organization is enhance%. For man# emplo#ees, an <official< appraisal intervie4 ma# be the onl# time the# get to have e>cl&sive, &ninterr&pte% access to their s&pervisor. 5ai% one emplo#ee of a large organization after his first formal performance appraisal, <$n t4ent# #ears of 4or8, that2s the first time an#one has ever bothere% to sit %o4n an% tell me ho4 $2m %oing.< he val&e of this intense an% p&rposef&l interaction bet4een a s&pervisors an% s&bor%inate sho&l% not be &n%erestimate%. .. MOTI/ATION AND SATISFACTION Performance appraisal can have a profo&n% effect on levels of emplo#ee motivation an% satisfaction E for better as 4ell as for 4orse. Performance appraisal provi%es emplo#ees 4ith recognition for their 4or8 efforts. he po4er of social recognition as an incentive has been long note%. $n fact, there is evi%ence that h&man beings 4ill even prefer negative recognition in preference to no recognition at all. $f nothing else, the e>istence of an appraisal program in%icates to an emplo#ee that the organization is gen&inel# intereste% in their in%ivi%&al performance an% %evelopment. his alone can have a positive infl&ence on the in%ivi%&al2s sense of 4orth, commitment an% belonging. he strength an% prevalence of this nat&ral h&man %esire for in%ivi%&al recognition sho&l% not be overloo8e%. Absenteeism an% t&rnover rates in some organizations might be greatl# re%&ce% if more attention 4ere pai% to it. Reg&lar performance appraisal, at least, is a goo% start. 0. TRAINING AND DE/ELOPMENT Performance appraisal offers an e>cellent opport&nit# E perhaps the best that 4ill ever occ&r E for a s&pervisor an% s&bor%inate to recognize an% agree &pon in%ivi%&al training an% %evelopment nee%s. !&ring the %isc&ssion of an emplo#ee2s 4or8 performance, the presence or absence of 4or8 s8ills can become ver# obvio&s E even to those 4ho habit&all# reject the i%ea of training for themH Performance appraisal can ma8e the nee% for training more pressing an% relevant b# lin8ing it clearl# to performance o&tcomes an% f&t&re career aspirations. From the point of vie4 of the organization as a 4hole, consoli%ate% appraisal %ata can form a pict&re of the overall %eman% for training. his %ata ma# be anal#se% b# variables s&ch as se>, %epartment, etc. $n this respect, performance appraisal can provi%e a reg&lar an% efficient training nee%s a&%it for the entire organization.

1. RECR,ITMENT AND IND,CTION Appraisal %ata can be &se% to monitor the s&ccess of the organization2s recr&itment an% in%&ction practices. For e>ample, ho4 4ell are the emplo#ees performing 4ho 4ere hire% in the past t4o #earsI Appraisal %ata can also be &se% to monitor the effectiveness of changes in recr&itment strategies. *# follo4ing the #earl# %ata relate% to ne4 hires 9an% given s&fficient n&mbers on 4hich to base the anal#sis: it is possible to assess 4hether the general ?&alit# of the 4or8force is improving, sta#ing stea%#, or %eclining. 2. EMPLOYEE E/AL,ATION ho&gh often &n%erstate% or even %enie%, eval&ation is a legitimate an% major objective of performance appraisal. *&t the nee% to eval&ate 9i.e., to j&%ge: is also an ongoing so&rce of tension, since eval&ative an% %evelopmental priorities appear to fre?&entl# clash. Jet at its most basic level, performance appraisal is the process of e>amining an% eval&ating the performance of an in%ivi%&al. ho&gh organizations have a clear right E some 4o&l% sa# a %&t# E to con%&ct s&ch eval&ations of performance, man# still recoil from the i%ea. o them, the e>plicit process of j&%gement can be %eh&manizing an% %emoralizing an% a so&rce of an>iet# an% %istress to emplo#ees. $t is been sai% b# some that appraisal cannot serve the nee%s of eval&ation an% %evelopment at the same timeC it m&st be one or the other. *&t there ma# be an acceptable mi%%le gro&n%, 4here the nee% to eval&ate emplo#ees objectivel#, an% the nee% to enco&rage an% %evelop them, can be balance%.

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C3ALLENGES OF PERFORMANCE APPRAISAL

$n or%er to ma8e a performance appraisal s#stem effective an% s&ccessf&l, an organization comes across vario&s challenges an% problems. he main challenges involve% in the performance appraisal process are3 .. DETERMINING T3E E/AL,ATION CRITERIA $%entification of the appraisal criteria is one of the biggest problems face% b# the top management. he performance %ata to be consi%ere% for eval&ation sho&l% be caref&ll# selecte%. For the p&rpose of eval&ation, the criteria selecte% sho&l% be in ?&antifiable or meas&rable terms 0. CREATE A RATING INSTR,MENT he p&rpose of the Performance appraisal process is to j&%ge the performance of the emplo#ees rather than the emplo#ee. organization. 1. LAC4 OF COMPETENCE op management sho&l% choose the raters or the eval&ators caref&ll#. necessar# training to carr# o&t the appraisal process objectivel#. 2. ERRORS IN RATING AND E/AL,ATION Man# errors base% on the personal bias li8e stereot#ping, halo effect 9i.e. one trait infl&encing the eval&atorAs rating for all other traits: etc. ma# creep in the appraisal process. herefore the rater sho&l% e>ercise objectivit# an% fairness in eval&ating an% rating the performance of the emplo#ees 5. RESISTANCE he appraisal process ma# face resistance from the emplo#ees an% the tra%e &nions for the fear of negative ratings. herefore, the emplo#ees sho&l% be comm&nicate% an% clearl# e>plaine% the p&rpose as 4ell the process of appraisal. he stan%ar%s sho&l% be clearl# comm&nicate% an% ever# emplo#ee sho&l% be ma%e a4are that 4hat e>actl# is e>pecte% from him;her. he# sho&l% have the re?&ire% e>pertise an% the 8no4le%ge to %eci%e the criteria acc&ratel#. he# sho&l% have the e>perience an% the he foc&s of the s#stem sho&l% be on the %evelopment of the emplo#ees of the

PROCESS OF PERFORMANCE APPRAISAL

.. ESTA-LIS3ING PERFORMANCE STANDARDS he first step in the process of performance appraisal is the setting &p of the stan%ar%s 4hich 4ill be &se% to as the base to compare the act&al performance of the emplo#ees. his step re?&ires setting the criteria to j&%ge the performance of the emplo#ees as s&ccessf&l or &ns&ccessf&l an% the %egrees of their contrib&tion to the organizational goals an% objectives. great care sho&l% be ta8en to %escribe the stan%ar%s. 0. COMM,NICATING T3E STANDARDS (nce set, it is the responsibilit# of the management to comm&nicate the stan%ar%s to all the emplo#ees of the organization. he emplo#ees sho&l% be informe% an% the stan%ar%s sho&l% be clearl# e>plaine% to the. his 4ill help them to &n%erstan% their roles an% to 8no4 4hat e>actl# is e>pecte% from them. he stan%ar%s sho&l% also be comm&nicate% to the appraisers or the eval&ators an% if re?&ire%, the stan%ar%s can also be mo%ifie% at this stage itself accor%ing to the relevant fee%bac8 from the emplo#ees or the eval&ators. he stan%ar%s set sho&l% be clear, easil# &n%erstan%able an% in meas&rable terms. $n case the performance of the emplo#ee cannot be meas&re%,

1. MEAS,RING T3E ACT,AL PERFORMANCE he most %iffic&lt part of the Performance appraisal process is meas&ring the act&al performance of the emplo#ees that is the 4or8 %one b# the emplo#ees %&ring the specifie% perio% of time. $t is a contin&o&s process 4hich involves monitoring the performance thro&gho&t the #ear. his stage re?&ires the caref&l selection of the appropriate techni?&es of meas&rement, ta8ing care that personal bias %oes not affect the o&tcome of the process an% provi%ing assistance rather than interfering in an emplo#ees 4or8. 2. COMPARING T3E ACT,AL 6IT3 T3E DESIRED PERFORMANCE he act&al performance is compare% 4ith the %esire% or the stan%ar% performance. he comparison tells the %eviations in the performance of the emplo#ees from the stan%ar%s set. he res&lt can sho4 the act&al performance being more than the %esire% performance or, the act&al performance being less than the %esire% performance %epicting a negative %eviation in the organizational performance. $t incl&%es recalling, eval&ating an% anal#sis of %ata relate% to the emplo#eesA performance. 5. DISC,SSING RES,LTS he res&lt of the appraisal is comm&nicate% an% %isc&sse% 4ith the emplo#ees on oneEtoEone basis. he foc&s of this %isc&ssion is on comm&nication an% listening. he res&lts, the problems an% the possible sol&tions are %isc&sse% 4ith the aim of problem solving an% reaching consens&s. he fee%bac8 sho&l% be given 4ith a positive attit&%e as this can have an effect on the emplo#eesA f&t&re performance. he

p&rpose of the meeting sho&l% be to solve the problems face% an% motivate the emplo#ees to perform better. 7. DECISION MA4ING he last step of the process is to ta8e %ecisions 4hich can be ta8en either to improve the performance of the emplo#ees, ta8e the re?&ire% corrective actions, or the relate% FR %ecisions li8e re4ar%s, promotions, %emotions, transfers etc.

TRADITIONAL MET3ODS OF PERFORMANCE APPRAISAL

.. ESSAY APPRAISAL MET3OD his tra%itional form of appraisal, also 8no4n as KFree Form metho%L involves a %escription of the performance of an emplo#ee b# his s&perior. he %escription is an eval&ation of the performance of an# in%ivi%&al base% on the facts an% often incl&%es e>amples an% evi%ences to s&pport the information. A major %ra4bac8 of the metho% is the inseparabilit# of the bias of the eval&ator. 0. STRAIG3T RAN4ING MET3OD his is one of the ol%est an% simplest techni?&es of performance appraisal. $n this metho%, the appraiser ran8s the emplo#ees from the best to the poorest on the basis of their overall performance. $t is ?&ite &sef&l for a comparative eval&ation. 1. PAIRED COMPARISON A better techni?&e of comparison than the straight ran8ing metho%, this metho% compares each emplo#ee 4ith all others in the gro&p, one at a time. After all the comparisons on the basis of the overall comparisons, the emplo#ees are given the final ran8ings. 2. CRITICAL INCIDENTS MET3ODS $n this metho% of Performance appraisal, the eval&ator rates the emplo#ee on the basis of critical events an% ho4 the emplo#ee behave% %&ring those inci%ents. $t incl&%es both negative an% positive points. he %ra4bac8 of this metho% is that the s&pervisor has to note %o4n the critical inci%ents an% the emplo#ee behavio&r as an% 4hen the# occ&r. 5. FIELD RE/IE6 $n this metho%, a senior member of the FR %epartment or a training officer %isc&sses an% intervie4s the s&pervisors to eval&ate an% rate their respective s&bor%inates. A major %ra4bac8 of this metho% is that it is a ver# time cons&ming metho%. *&t this metho% helps to re%&ce the s&periorsA personal bias. 7. C3EC4LIST MET3OD he rater is given a chec8list of the %escriptions of the behavio&r of the emplo#ees on job. he chec8list contains a list of statements on the basis of 4hich the rater %escribes the on the job performance of the emplo#ees. 8. GRAP3IC RATING SCALE $n this metho%, an emplo#eeAs ?&alit# an% ?&antit# of 4or8 is assesse% in a graphic scale in%icating %ifferent %egrees of a partic&lar trait. he factors ta8en into consi%eration incl&%e both the personal characteristics an% characteristics relate% to the onEtheEjob performance of the emplo#ees. For e>ample a trait li8e Mob Nno4le%ge ma# be j&%ge% on the range of average, above average, o&tstan%ing or &nsatisfactor#. 9. FORCED DISTRI-,TION

o eliminate the element of bias from the raterAs ratings, the eval&ator is as8e% to %istrib&te the emplo#ees in some fi>e% categories of ratings li8e on a normal %istrib&tion c&rve. he rater chooses the appropriate fit for the categories on his o4n %iscretion.

MODERN MET3ODS OF PERFORMANCE APPRAISAL

.. ASSESSMENT CENTRES An assessment centre t#picall# involves the &se of metho%s li8e social;informal events, tests an% e>ercises, assignments being given to a gro&p of emplo#ees to assess their competencies to ta8e higher responsibilities in the f&t&re. "enerall#, emplo#ees are given an assignment similar to the job the# 4o&l% be e>pecte% to perform if promote%. he traine% eval&ators observe an% eval&ate emplo#ees as the# perform the assigne% jobs an% are eval&ate% on job relate% characteristics. he major competencies that are j&%ge% in assessment centres are interpersonal s8ills, intellect&al capabilit#, planning an% organizing capabilities, motivation, career orientation etc. assessment centres are also an effective 4a# to %etermine the training an% %evelopment nee%s of the targete% emplo#ees. 0. -E3A/IORALLY ANC3ORED RATING SCALES *ehaviorall# Anchore% Rating 5cales 9*AR5: is a relativel# ne4 techni?&e 4hich combines the graphic rating scale an% critical inci%ents metho%. $t consists of pre%etermine% critical areas of job performance or sets of behavioral statements %escribing important job performance ?&alities as goo% or ba% 9for eg. the ?&alities li8e interEpersonal relationships, a%aptabilit# an% reliabilit#, job 8no4le%ge etc:. statements are %evelope% from critical inci%ents. $n this metho%, an emplo#eeAs act&al job behavio&r is j&%ge% against the %esire% behavio&r b# recor%ing an% comparing the behavio&r 4ith *AR5. !eveloping an% practicing *AR5 re?&ires e>pert 8no4le%ge. 1. 3,MAN RESO,RCE ACCO,NTING MET3OD F&man reso&rces are val&able assets for ever# organization. F&man reso&rce acco&nting metho% tries to fin% the relative 4orth of these assets in the terms of mone#. $n this metho% the Performance appraisal of the emplo#ees is j&%ge% in terms of cost an% contrib&tion of the emplo#ees. he cost of emplo#ees incl&%e all the e>penses inc&rre% on them li8e their compensation, recr&itment an% selection costs, in%&ction an% training costs etc 4hereas their contrib&tion incl&%es the total val&e a%%e% 9in monetar# terms:. he %ifference bet4een the cost an% the contrib&tion 4ill be the performance of the emplo#ees. $%eall#, the contrib&tion of the emplo#ees sho&l% be greater than the cost inc&rre% on them. hese

17: DEGREE PERFORMANCE APPRAISALS

'-1 %egree fee%bac8, also 8no4n as 2m&ltiErater fee%bac82, is the most comprehensive appraisal 4here the fee%bac8 abo&t the emplo#eesA performance comes from all the so&rces that come in contact 4ith the emplo#ee on his job. '-1 %egree respon%ents for an emplo#ee can be his;her peers, managers 9i.e. s&perior:, s&bor%inates, team members, c&stomers, s&ppliers; ven%ors E an#one 4ho comes into contact 4ith the emplo#ee an% can provi%e val&able insights an% information or fee%bac8 regar%ing the KonEtheEjobL performance of the emplo#ee. '-1 %egree appraisal has fo&r integral components3 1. 5elf appraisal 2. 5&periorAs appraisal '. 5&bor%inateAs appraisal ). Peer appraisal 5elf appraisal gives a chance to the emplo#ee to loo8 at his;her strengths an% 4ea8nesses, his achievements, an% j&%ge his o4n performance. 5&periorAs appraisal forms the tra%itional part of the '-1 %egree appraisal 4here the emplo#eesA responsibilities an% act&al performance is rate% b# the s&perior. 5&bor%inates appraisal gives a chance to j&%ge the emplo#ee on the parameters li8e comm&nication an% motivating abilities, s&periorAs abilit# to %elegate the 4or8, lea%ership ?&alities etc. Also 8no4n as internal c&stomers, the correct fee%bac8 given b# peers can help to fin% emplo#eesA abilities to 4or8 in a team, coEoperation an% sensitivit# to4ar%s others.

5elf assessment is an in%ispensable part of '-1 %egree appraisals an% therefore '-1 %egree Performance appraisal have high emplo#ee involvement an% also have the strongest impact on behavior an% performance. $t provi%es a <'-1E%egree revie4< of the emplo#eesA performance an% is consi%ere% to be one of the most cre%ible performance appraisal metho%s. '-1 %egree appraisal is also a po4erf&l %evelopmental tool beca&se 4hen con%&cte% at reg&lar intervals 9sa# #earl#: it helps to 8eep a trac8 of the changes othersA perceptions abo&t the emplo#ees. A '-1 %egree appraisal is generall# fo&n% more s&itable for the managers as it helps to assess their lea%ership an% managing st#les. his techni?&e is being effectivel# &se% across the globe for performance appraisals. 5ome of the organizations follo4ing it are @ipro, $nfos#s, an% Reliance $n%&stries etc.

Argum !t% Agai!%t 17: D gr

P r&orma!c A((rai%al

!espite the fact that '-1 %egree appraisals are being 4i%el# &se% thro&gho&t the 4orl% for appraising the performance of the emplo#ees at all levels, man# FR e>perts an% professionals arg&ment against &sing the techni?&e of '-1 %egree appraisals. he main arg&ments are3 follo4E&p. f the process. (ften, the process s&ffers beca&se of the lac8 of 8no4le%ge on the part of the participants or the raters. '-1 %egree fee%bac8 can be a%versel# affecte% b# the c&stomersA perception of the organisation an% their incomplete 8no4le%ge abo&t the process an% the clarit# o '-1 performance rating s#stem is not a vali%ate% or corroborate% techni?&e for Performance appraisal. @ith the increase in the n&mber of raters from one to five 9commonl#:, it become %iffic&lt to separate, calc&late an% eliminate personal biasness an% %ifferences. $t is often time cons&ming an% %iffic&lt to anal#ze the information gathere%. he res&lts can be manip&late% b# the emplo#ees to4ar%s their %esire% ratings 4ith the help of the raters. he '-1 %egree appraisal mechanism can have a a%versel# effect the motivation an% the performance of the emplo#ees. '-1 %egree fee%bac8 G as a processE re?&ires commitment of top management an% the FR, reso&rces9time, financial reso&rces etc:, planne% implementation an%

MANAGEMENT -Y O-;ECTI/ES
he concept of OManagement b# (bjectivesA 9M*(: 4as first given b# Peter !r&c8er in 1/+). $t can be %efine% as a process 4hereb# the emplo#ees an% the s&periors come together to i%entif# common goals, the emplo#ees set their goals to be achieve%, the stan%ar%s to be ta8en as the criteria for meas&rement of their performance an% contrib&tion an% %eci%ing the co&rse of action to be follo4e%. he essence of M*( is participative goal setting, choosing co&rse of actions an% %ecision ma8ing. An important part of the M*( is the meas&rement an% the comparison of the emplo#eeAs act&al performance 4ith the stan%ar%s set. $%eall#, 4hen emplo#ees themselves have been involve% 4ith the goal setting an% the choosing the co&rse of action to be follo4e% b# them, the# are more li8el# to f&lfill their responsibilities. T3E M-O PROCESS he principle behin% Management b# (bjectives 9M*(: is to create empo4ere% emplo#ees 4ho have clarit# of the roles an% responsibilities e>pecte% from them, &n%erstan% their objectives to be achieve% an% th&s help in the achievement of organizational as 4ell as personal goals. 5ome of the important feat&res an% a%vantages of M*( are3 ,larit# of goals G @ith M*(, came the concept of 5MAR goals i.e. goals that are3 5pecific Meas&rable Achievable Realistic, an% ime bo&n%. he goals th&s set are clear, motivating an% there is a lin8age bet4een organizational goals an% performance targets of the emplo#ees. he foc&s is on f&t&re rather than on past. "oals an% stan%ar%s are set for the performance for the f&t&re 4ith perio%ic revie4s an% fee%bac8. Motivation G $nvolving emplo#ees in the 4hole process of goal setting an% increasing emplo#ee empo4erment increases emplo#ee job satisfaction an% commitment. *etter comm&nication an% ,oor%ination G Fre?&ent revie4s an% interactions bet4een s&periors an% s&bor%inates helps to maintain harmonio&s relationships 4ithin the enterprise an% also solve man# problems face% %&ring the perio%.

ASSESSMENT CENTRES
Assessment centre refers to a metho% to objectivel# observe an% assess the people in action b# e>perts or FR professionals 4ith the help of vario&s assessment tools an% instr&ments. Assessment centers sim&late the emplo#eeAs onEtheEjob environment an% facilitate the assessment of their onEtheEjob performance. An assessment centre t#picall# involves the &se of metho%s li8e social;informal events, tests an% e>ercises, assignments being given to a gro&p of emplo#ees to assess their competencies an% onEtheEjob behavio&r an% potential to ta8e higher responsibilities in the f&t&re. "enerall#, emplo#ees are given an assignment similar to the job the# 4o&l% be e>pecte% to perform if promote%. characteristics. An assessment centre for Performance appraisal of an emplo#ee t#picall# incl&%es3 Social<I!&ormal E$ !t% = An assessment centre has a gro&p of participants an% also a fe4 assessors 4hich gives a chance to the emplo#ees to socialize 4ith a variet# of people an% also to share information an% 8no4 more abo&t the organisation. I!&ormatio! S %%io!% = information sessions are also a part of the assessment centres. proce%&res etc. A%%ig!m !t%> assignments in assessment centres incl&%e vario&s tests an% e>ercises 4hich are speciall# %esigne% to assess the competencies an% the potential of the emplo#ees. hese incl&%e vario&s intervie4s, ps#chometric tests, management games etc. all these assignments are foc&se% at the target job. he follo4ing are the common feat&res of all assessment centres3 he final res&lts is base% on the pass;fail criteria All the activities are carrie% o&t to fill the targete% job. 7ach session lasts from 1 to + %a#s. he res&lts are base% on the assessment of the assessors 4ith less emphasis on selfEassessment imme%iate revie4 or fee%bac8 are not provi%e% to the emplo#ees. he# provi%e he traine% eval&ators observe an% eval&ate emplo#ees as the# perform the assigne% jobs an% are eval&ate% on job relate%

information to the emplo#ees abo&t the organisation, their roles an% responsibilities, the activities an% the

An organizationAs h&man reso&rces can be a vital competitive a%vantage an% assessment centre helps in getting the right people in right places. he major competencies that are j&%ge% in assessment centres are interpersonal s8ills, intellect&al capabilit#, planning an% organizing capabilities, motivation, career orientation etc. assessment centres are also an effective 4a# to %etermine the training an% %evelopment nee%s of the targete% emplo#ees.

CONCL,SION

People %iffer in their abilities an% their aptit&%es.

here is al4a#s some %ifference bet4een the

?&alit# an% ?&antit# of the same 4or8 on the same job being %one b# t4o %ifferent people. herefore, performance management an% performance appraisal is necessar# to &n%erstan% each emplo#eeAs abilities, competencies an% relative merit an% 4orth for the organization. Performance appraisal rates the emplo#ees in terms of their performance.

Performance appraisal ta8es into acco&nt the past performance of the emplo#ees an% foc&ses on the improvement of the f&t&re performance of the emplo#ees.

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-I-LIOGRAP3Y

1. Performance Appraisal Fan%boo8 for 65 !epartment (f the $nterior 9eboo8:

0. http3;; ( r&orma!c >a((rai%al%.org

'. http3;;appraisals.na&8rih&b.com

). http3;;444.performanceEappraisal.com

For more Notes, Presentations, Project Reports visit a2zmba.blogspot.com hrmba.blogspot.com mbafin.blogspot.com