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“PERFORMANCE APPRAISAL” IN BANKING SECTOR
Submitted for the fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION (Sikkim Manipal University)
Submitted To: Mr. Pankaj Upadhyay Lecturer Sikkim Manipal University Under the Guidance of: Mr. Pankaj Upadhyay Lecturer Sikkim Manipal University
Submitted By: Ekta Bhatia MBA IV Semester Roll No. 510919106
I, Ekta Bhatia, hereby declare that the project titled
““PERFORMANCE APPRAISAL” IN BANKING SECTOR” is my own work and efforts which is completed under the supervision of Mr. Pankaj Upadhyay, senior lecturer of IIMT Management College, Meerut
The Research report has been submitted to Sikkim Manipal University, Centre 2017, New Delhi for the purpose of Research Report under the compliance of fulfillment of Master of Business Administration (M.B.A.).
Date: Place: Roll No.:
Ekta Bhatia MBA-4th Sem. 510919106
List of contents
Preface Acknowledgement Objective Of The Study About The Study Scope Of The Study Research Methodology Introduction To Banking
Sector HRM Approach “Performance Appraisal”
– A Systematic Approach ICICI Bank – Company Profile Needs And Importance Of
“Performance Appraisal” In Banking
“Performance Appraisal” And Performance Management In ICICI Bank Banner Corporation Banks On Halogen For Talent And Learning And Performance Management (For Practical Understanding) Conclusion Suggestion And Recommendation Bibliography 4 .
techniques and approaches of “Performance Appraisal” pertaining to the banking industry. In this study. need of “Performance Appraisal” in banks. Indian banking scenario. Banking sector is one of the emerging sectors of India. HR overview. In this report we discuss the banking industry. individual and both as a mutual entity 5 . As we know that in present scenario of cut throat competition in banking industry only the service is the factor that can make sense in banking industry.Preface This study is done for fulfillment of the requirement of Sikkim Manipal University to obtain the degree of Master of business management. we try to explore the importance of the “Performance Appraisal” in banking to uplift the standard of organization. we strive to find out the implication of “Performance Appraisal” in banking sector. we strive to find out what is the importance of HR in banking industry in specific with “Performance Appraisal”.
Pankaj Upadhyay for his guidance & support with his valuable inputs & knowledge. and family members for their support. I would like to thank my colleagues.Acknowledgement I would like to thank Mr. friends. guidance and active contribution that helped me a lot to collect secondary data and preparing this report Once again thanks to all for providing me your direct and indirect support for my research work and help in writing the report EKTA BHATIA 0bjective of the Study 6 .
To understand the concept of HR in special reference of “Performance Appraisal” To understand the application of “Performance Appraisal” in banking sector To understand the practical aspect of “Performance Appraisal” in banking scenario To understand the modern trends emerging in “Performance Appraisal” To understand the management approach towards “Performance Appraisal” To understand the banking scenario of India To gain the knowledge of the practical process of the “Performance Appraisal” To view the aspect of “Performance Appraisal” from managerial perspective To highlight the effectiveness of “Performance Appraisal” in banking sector To understand the need of “Performance Appraisal” for banking industry 7 .
About the study 8 .
This study refers to the need of “Performance Appraisal” for banking industry. importance and emerging trends in the field of “Performance Appraisal”. In this study we take the case of one of the leading bank. growth and prospect of banking in India. ICICI bank.The study. As we know the banking sector is one of the fastest growing sectors of our country. as our sample and try to find out their techniques used for “Performance Appraisal”. We have highlighted several trends of banking industry. and try to understand how the “Performance Appraisal” is done in banking sector. history of Indian banking. this reports takes the HR as 9 . Further we highlighted the role of HR. It signifies the role of HR in organizational perspective and highlight the rationale of active HR polices in an organization . its need and importance and “Performance Appraisal” as its one of the major tools. highlights the importance of “Performance Appraisal” in special reference of banking industry. ““Performance Appraisal” in Banking Sector”. In this study we strive to find out the need of “Performance Appraisal” for banks. For easy understanding of the study we have divided the entire study in to several chapters that gives the specific nature of the subject in question. the study highlights the perspective of HR in banking sector. Role of RBI as regulatory bank and the industrial importance bank as an institute to march the nation in economic growth.
We managed to collect the secondary data from ICICI bank and got the information about the HR policy and process of the bank. This study provides the theoretical knowledge about the “Performance Appraisal”s on the issue like a)need . g)trends and 10 . In this report we try to make the role and concept of HRM understood for our readers.managerial function rather than the staff activities . c)features . b) approach. In our study we highlighted the process of ICICI bank “Performance Appraisal” mechanism and the manner in which “Performance Appraisal” takes place in ICICI bank In special cases like the practical example of ICICI bank . e) employees feedback. f) process and other real aspect of the “Performance Appraisal” that provides the realistic view of the “Performance Appraisal” process that is carried out by the bank in actual work environment . The study is manly conducted on the basis of secondary data rather than the primary data. This study refers the “Performance Appraisal” technique as an effective managerial tool to enhance the efficiency and effectiveness to achieve the organizational and individual goals. e)approaches . b)importance . f)model .the study highlights: a) techniques . c) forms. The study is conducted is a simple manner and most of the data is collected through various sources. d) managerial approach. d)techniques .
other issues related to the banking industry . This study refers to the role of “Performance Appraisal” in a wide and in a systematic manner that takes place in a sequential way and covers almost all the aspect of the appraisal from employees to organization under the universal approach called “Performance Management” Scope of the study 11 .
opportunities in banking sector to implement the effective performance management system 12 . Need and importance of “Performance Appraisal” in banking industry brief introduction of Indian banking industry Introduction to ICICI bank Role of “Performance Appraisal” as managerial decision in banking sector in policy making and organizational success Practical challenges.Following aspects are covered under this study: A brief overview of the nature of the subject An introduction to the HR as a managerial function in special reference with ““Performance Appraisal”” New dimensions. Practical aspect of ““Performance Appraisal”” in ICICI bank Modern techniques emerging in ““Performance Appraisal””. techniques. approaches and thoughts in ““Performance Appraisal””.
Research Methodology 13 .
that’s why the following research methods. This design allows observation without affecting normal behavior.Descriptive research design Descriptive research design is a scientific method that is used in this study which helps in observing and describing the behavior of a subject without influencing it in any way to obtain a general overview of the subject. Though the results from a descriptive research can in no way be used as a definitive answer or to disapprove a hypothesis but. techniques and components are used to facilitate the study Research Design. or by companies wishing to judge the morale of staff. It is also useful because it is not possible to test and measure the large number of samples needed for more quantitative types of experimentation These types of experiments are often used by anthropologists. if the 14 . but some scientific method and techniques classified it as the research. psychologists and social scientists to observe natural behaviors without affecting them in any way. It is also used by market researchers to judge the habits of customers.The study seems to be the observation and a description of the project where we try to find out the hidden aspect or bring out the concept for further explanation.
limitations are understood, they can still be a useful tool in many areas of scientific and normal study research such as this project.
Type of data – secondary data
Secondary data was used for this study as the research design is descriptive in nature so we tried to collect the data available through other sources on the subject. Some times, primary data is also collected through observation method to facilitate the research work
Sources of data
The following sources are used for collecting the data for this study:
Books internet Journals News papers Personal sources
Sampling – judgmental sampling
Judgment sampling is a common no probability method. This sampling is selected on the judgment. This is usually and extension of convenience sampling. We have decided to draw the entire sample from one "representative" bank even though the population includes all banks. When using this method, we try to ensure that the chosen sample is truly representative of the entire population.
Introduction to Banking Sector
Banking can be defined in various ways as the definition of the bank varies from country to country and keeps on changing on the basis of the activities carried out by the banks. In present dynamic business scenario, banking can be defined as the activities carried out with the bank on individual or corporate level. We can understand the concept of the banking by looking into the activities of the bank. A bank is a well regularized and licensed financial institute to assist the individual and corporate customer in their financial needs. Normally banks provide the following services to its retail (individual) and corporate clients: • • • • • • • • • • • • • • Transactional services, Services related to monetary transaction through current and saving account, Investment services, Fixed deposit , Letter of credit , Treasury services , Bill of exchange , Foreign exchange , Assisting in trade through Letter of credit, Letter of guarantee, Performance bond , Project financing , Personal loan , Credit card , 17
Banking sector In India 18 .• Home loan etc.
India has 88 scheduled commercial banks (SCBs) . relegating it to commercial banking functions. a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India. the government nationalized the six next largest in 1980. They have a combined network of over 53. with the private and foreign banks holding 18. In 1969 the government nationalized the 14 largest commercial banks. they may be publicly listed and traded on stock exchanges) and 38 foreign banks.5% respectively. According to a report by ICRA Limited. 31 private banks (these do not have government stake.27 public sector banks (that is with the Government of India holding a stake). the public sector banks hold over 75 percent of total assets of the banking industry.Banking in India originated in the last decades of the 18th century. a rating agency. The banking industry in India seems to be unaffected from the global financial crises which started from U. Despite the fallout and nationalization of banks across developed economies. After India's independence in 1947. The Indian banking industry is well placed as compare to their banking industries western counterparts which are depending upon government bailout and 19 . The oldest bank in existence in India is the ‘State Bank of India’. Currently. which in 1935 formally took over these responsibilities from the then Imperial Bank of India. the Reserve Bank was nationalized and given broader powers.000 branches and 17. banks in India seems to be on the strong fundamental base and seems to be well insulated from the financial turbulence emerging from the western economies.S in the last quarter of 2008.2% and 6.000 ATMs.
regular intervention by central bank. There will be more focus on analyzing borrower’s financial health rather than capability. income level and number of cardholders. like assets size. The strong economic growth in the past. It also analyzes the current performance and key market trends. 20 . The report “Indian Banking Sector Forecast to 2012” contains comprehensive research and rational analysis on various segments. proactive adjustment of monetary policy and so called close banking culture has favored the banking industry in India in recent global financial turmoil. Although there will be no impact on the Indian banking system similar to that in west but the banks in India will adopt for more of defensive approach in credit disbursal in coming period.stimulus packages. and helps clients to understand various products available in the market and their future scope. In order to safe guard their interest. and rules and regulations laid by the regulator and supervisor of the financial system. The forecast given in this report is not based on a complex economic model but is intended as a rough guide to the direction in which the market is likely to move. low defaulter ratio. past trends. absence of complex financial products. in the Indian banking industry. Reserve Bank of India (RBI). The future projection is done on the basis of the current market scenario. banks will follow stringent norms for credit disbursal.
retail trade. Govt. The role of Banking in the process of financial intermediation has been undergoing a profound transformation. the onus is on the Government to encourage the PSBs to be run on professional lines. The RBI has given licenses to new private sector banks as part of the liberalization process. The RBI has also been granting licensees to industrial houses.The Economic Liberalization process has increasingly exposed the Banking Sector to international competition. Hence. Shares of the leading PSBs are already listed on the stock exchanges. To promote banking sector in India. The PSBs will play an important role in the industry due to its number of branches and foreign banks facing the constraint of limited number of branches. the revolution in information technology has brought about sea changes in the way banking transaction are carried out Almost 80% of the businesses are still controlled by Public Sector Banks (PSBs). Consequently. small business and agricultural finance. PSBs are still dominating the commercial banking system. in order to achieve an efficient banking system. owing to changes in the global financial system. has taken many steps and formed several committee to review the banking needs and the prospect the current scenario along with the safeguarding the interest of the customers 21 . Many banks are successfully running in the retail and consumer segments but are yet to deliver services to industrial finance.
The general superintendence and direction of the Bank is entrusted to Central 22 . the Reserve Bank of India is managing its twin responsibilities of monetary stability and exchange rate stability.Reserve bank of India Economists and Planners consider monetary stability in an economy as the most important function of a Central Bank. The Prime function of a Central Bank is to ensure and secure monetary stability i. Managing the twin functions simultaneously is accompanied by trade-offs and conflicts. 100 each fully paid which was entirely owned by private shareholders in the beginning. The share capital was divided into shares of Rs. In an open economy framework with lesser restrictions on capital flows. The central bank of the country is the Reserve Bank of India (RBI). 5 crores on the basis of the recommendations of the Hilton Young Commission. The Government held shares of nominal value of Rs. 2. Since the inception of the economic reforms when the Indian Economy embarked on a programme of liberalization and exchange rate flexibility. In an open economy framework however the Central Banks is additionally entrusted with the responsibility of managing the exchange rate.e. to ensure that the growth rate of money supply is consistent with the growth rate of output of goods and services. 20. It was established in April 1935 with a share capital of Rs.000. managing the monetary stability and exchange rate stability pose a challenge for the Central Bank. Reserve Bank of India was nationalized in the year 1949. The economy follows a managed float system with RBI intervening in the event of violent fluctuations in exchange rate.
The Reserve Bank of India Act. one Government official from the Ministry of Finance. Local Boards consist of five members each Central Government appointed for a term of four years to represent territorial and economic interests and the interests of co-operative and indigenous banks. ten nominated Directors by the Government to give representation to important elements in the economic life of the country.Board of Directors of 20 members. The Act. 1934 was commenced on April 1. 1934 (II of 1934) provides the statutory basis of the function of the bank. Major Banks in India 23 . 1935. Kolkata. and four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai. Chennai and New Delhi. The Bank was constituted for the need of following: To regulate the issue of banknotes To maintain reserves with a view to securing monetary stability and To operate the credit and currency system of the country to its advantage. the Governor and four Deputy Governors.
Public sector banks • • • • • • • • State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore • • • • • • • • • • • • Dena Bank IDBI Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank 24 .
Private sector banks • Bank of Rajasthan 25 .
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab (Merged with HDFC bank) City Union Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank ICICI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Lord Krishna Bank ( now Centurion Bank of Punjab) Nainital Bank Nedungadi Bank (now Punjab National Bank) Ratnakar Bank Rupee Bank Saraswat Bank SBI Commercial and International Bank South Indian Bank Tamil Nadu Mercantile Bank Thane Janata Sahakari Bank Bassein Catholic Bank United Western Bank ( now IDBI Bank) YES Bank 26 .
Foreign Banks • ABN Amro bank 27 .
• • • • • • • • • • • • • • • • • • • • • • • • • • • • Abu Dhabi Commercial Bank Ltd American Express Bank Antwerp Diamond Bank Arab Bangladesh Bank Bank International Indonesia Bank of America Bank of Bahrain & Kuwait Bank of Ceylon Bank of Nova Scotia Bank of Tokyo Mitsubishi UFJ Barclays Bank BNP Paribas Calyon Bank ChinaTrust Commercial Bank Citibank DBS Bank Deutsche Bank HSBC (Hongkong & Shanghai Banking Corporation) JPMorgan Chase Bank Krung Thai Bank Mashreq Bank Mizuho Corporate Bank Oman International Bank Shinhan Bank Société Générale Sonali Bank Standard Chartered Bank State Bank of Mauritius 28 .
Banks with Representative Offices in India: American Banks • The Bank of New York 29 .
B.C. Bank N.V.• Wachovia Bank Australian Banks • • • Commonwealth Bank National Bank Australia Westpac Banking Corporation Austrian Banks • Raiffeisen Zentral Bank Osterreich Belgian Banks • • Fortis Bank K. Canadian Banks • Royal bank of Canada UAE Banks • Emirates Bank International French Banks • • Credit Industriel et Commercial Natixis German Banks • • Bayerische Hypo und Vereinsbank Commerzbank 30 .
• • • • Dresdner Bank DZ Bank AG Deutsche Zentral – Genossenschafts Bank HSH Nordbank Landesbank Baden – Wurttemberg Irish Banks • DEPFA Bank Italian Banks • • • • • • • • Banc Intesa Banca Commerciale Italiana Banca di Roma Banca Populare Di Verona E Novara Banca Popolare di Vicenza BPU Banca –Banche Popolari Unite Monte Dei Paschi Di Sienna Sanpaolo IMI Bank Uni Credito Italiano Nepalese Banks • Everest Bank Portuguese Banks • Caixa Geral de Depositos Russian Banks • • • Vnesheconombank VTB India Promsvyazbank 31 .
South African Banks • First Rand Bank South Korean Banks • Wori Bank Spanish Banks • • Banco de Sabadell Banco Bilbao Vizcaya Argentaria SriLankan Banks • Hatton National Bank Swiss Banks • • UBS Zurcher Kantonalbank Rural Banks • • • • Adhiyaman Grama Bank Alaknanda Gramin Bank ( Now Uttranchal Gramin Bank) Andhra Pragathi Grameena Bank Avadh Gramin Bank 32 .
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • Aryavart Gramin Bank Balasore Gramya Bank Ballia Kshetriya Gramin Bank Banaskantha Mehsana Gramin Bank Bangiya Grameen Vikash Bank Bareilly Kshetriya Gramin Bank Baroda Uttar Pradesh Gramin Bank Bijapur Grameena Bank Bilaspur-Raipur Kshetriya Gramin Bank Bolangir Anchalik Gramya Bank Bundelkhand Kshetriya Gramin Bank Bundi Chittorgarh Kshetriya Gramin Bank Cauvery Grameena Bank Chaitanya Godavari Grameena Bank Chambal Kshetriya Gramin Bank Champaran Kshetriya Gramin Bank Chhatrasal Gramin Bank Chhindwara Seoni Kshetriya Gramin Bank Chitradurga Gramin Bank Cuttack Gramya Bank Damoh Panna Sagar Kshetriya Gramin Bank Devipatan Kshetriya Gramin Bank Dhenkanal Gramya Bank Dungarpur Banswara Kshetriya Gramin Bank Ellaquai Dehati Bank Farrukhabad Gramin Bank Gaur Gramin Bank Gurgaon Gramin Bank Hadoti Kshetriya Gramin Bank 33 .
Hoshangabad Kutch Grameen Bank Malaprabha Grameena Bank Mandla Balaghat Kshetriya Gramin Bank Manjira Grameena Bank Marwar Ganganagar Bikaner Gramin Bank (Previously : Marwar Gramin Bank) Mewar Aanchalik Gramin Bank Nagarjuna Grameena Bank Netravati Grameena Bank Nimar Kshetriya Gramin Bank North Malabar Gramin Bank • • • • • 34 .• • • • • • • • • • • • • • • • • • • • • • • Himachal Gramin Bank Hissar-Sirsa Kshetriya Gramin Bank Indore Ujjain Kshetriya Gramin Bank Jaipur Nagaur Aanchalik Gramin Bank Jamnagar Rajkot Gramin Bank Jamuna Gramin Bank Jhabua-Dhar Kshetriya Gramin Bank Jharkhand Gramin Bank Kakathiya Grameena Bank Kalpatharu Grameena Bank Kamraz Rural Bank Kanpur Kshetriya Gramin Bank Kapurthala Ferozpur Kshetriya Gramin Bank Kashi Gomti Samyut Gramin Bank Kisan Gramin Bank.Budaun Kolar Gramin Bank Krishna Grameena Bank Kshetriya Gramin Bank.
Etah.Mathura.Agra.• • • Panchmahal Vadodara Gramin Bank Pandyan Grama Bank Pinakini Grameena Bank (merged to form Andhra Pragathi Grameena Bank) Pragjyotish Gaonlia Bank Prathama Bank Raigarh Kshetriya Gramin Bank Rani Lakshmi Bai Kshetriya Gramin Bank Ratlam Mandsaur Kshetriya Gramin Bank Rayalaseema Grameena Bank (merged to form Andhra Pragathi Grameena Bank) Rewa-Sidhi Gramin Bank Sahyadri Gramin Bank Samyut Kshetriya Gramin Bank Sangameshwara Grameena Bank Shahjahanpur Kshetriya Gramin Bank Shreyas Gramin Bank (Aligarh.Firozabad) Shivpuri Guna Kshetriya Gramin Bank South Malabar Gramin Bank Sree Anantha Grameena Bank (merged to form Andhra Pragathi Grameena Bank) Sri Saraswati Grameena Bank Sri Visakha Grameena Bank Surat Bharuch Gramin Bank Thar Aanchalik Gramin Bank Tripura Gramin Bank Tungabhadra Gramin Bank Vidur Gramin Bank MCB • • • • • • • • • • • • • • • • • • • • • • • 35 .
R M Approach) 36 .• Madhya Bharat Gramin Bank Human Resources Management Approach (H.
It is characterized by an emphasis on strategic integration. and are the responsibility of HR.R can be well understood as a model of personnel management that focuses on the individual rather than taking a collective approach. It is the responsibility of human resource managers in a corporate context to conduct these activities in an effective. in fact – of professionals. Recognizing the fact that people are a company’s greatest asset. preservation and development of high caliber people are a source of competitive advantage for our business. and consistent manner” The Human Resources (HR) function provides significant support and advice to line management. When applied. legal. workforce flexibility. H. Human resource is an increasingly prominent field that is taking shape throughout industries and workplaces world wide. fair. and quality of goods and services. employee commitment. generalists and specialists in the area of human relations. The attraction. there has also been a major rise in the amount of knowledge and innovation pertaining to the most efficient and productive methods of streamlining workforce management policy. business leaders across the globe are coming to rely more and more upon an effective management policy that applies specifically to the area of human resources. there are already a great number 37 .“Human resource management's objective is to maximize the return on investment from the organization's human capital and minimize financial risk. With a rapid increase – a boom. Responsibility for human resource management is often devolved to line management.
A business of any size needs employees in order for it to run. training and development as a function of human capital management. That’s why the application of human resources management focuses largely on a more sensitive and human analysis to determine what really works with employees. this failure has prompted close study into how to effectively see that human capital is treated right and is able to reach its full potential. properly managing a workforce is a lot more complicated than. Along with employee training. employees need to be properly managed in order for optimal efficacy to be achieved. Now. Indeed. say. is the definition of human resources? Essentially. How to find the best talent available on the global labor market place is often a problem that the human resources department will strive to tackle. But what. As an important – the most important – asset for any business leader. computer systems. human resources departments also delve into the area of applicant tracking. 38 . exactly. HR applies to the workforce managed by any employer. Making sure that employees’ abilities are correctly and optimally nurtured is essential to seeing a worthwhile return on investment come from their contribution to the company. the mechanistic approach to employee relations has often failed. once their training period is over. One of the major aspects of HR maintenance involves employee recruitment. Fortunately. the maintenance of a company’s material capital such as machinery. etc.of proven techniques which result in the actual increases of profit margins.
Facts and figures are the quantitative elements of successful management. the monitoring of interplay between workers in order to design a more efficient employee management system.e. there is a lot more. who individually and collectively contribute to the achievement of the strategic objectives of the organization. Actually. i. are those that actually make or break an organization. retaining and developing employees. Human Resources Management (HRM) is the strategic management of the employees. HRM functions as the 39 . Aiming to enable the organization to achieve its strategic goals by attracting. the cognitive aspects. own goals and own personalities and as such they cannot be perceived as a whole. HRM holds that the organization should be able to employ both individual and group psychology in order to commit employees to the achievement of organizational goals. Assuming that the employees of an organization are individuals with own mental maps and perceptions. Successful companies are those that consider their human capital as their most important asset. the compilation of benefits packages as well as a variety of other vital functions that relate directly to the employee workforce Organizational Psychology holds that successful organizations do not owe their success solely to market realities and sustainable competitive advantages.In addition. human resources departments take care of a variety of concerns such as labor relations – the crucial and highly sensitive negotiations between employees and management – the production of job descriptions. yet the qualitative.
who are ready to offer their best. but it becomes the outcome of strategic consensus. decision making is not subject to the individual perceptions of the HR or the General Manager. understand and evaluate these needs in order to make its employees perceive their job as a part of their personal life. and at a later stage. A company should first become aware of the needs of its employees. The main goals / responsibilities of HRM are: • To retain low employee turnover rate by inspiring people to work for the company 40 . To that end. The HRM activities in modern organizations are typically performed in communication with the General Management in an effort to provide a variety of views when a decision must be taken. HRM is very crucial for the whole function of an organization because it assists the organization to create loyal employees.link between the organization and the employees. In that way. and not as a routine obligation.
Unfortunately. Even companies that are voted in the top-ten places to work at. cognitive aspects. Therefore. Modern organizations can survive in the dynamic. In doing so. The recruitment and selection of the best employees is a very difficult obligation. often endure long periods of hard work to realize that human element is all an organization should care about. New challenges arise even now for the organization. while making employees working more efficiently. On the other hand.• To attract new employees • To contribute to employee development To achieve these goals. it plays a significant role in clarifying the organization's problems and providing solutions. Human Resources Management trains and motivates the employees by communicating ethical policies and socially responsible behavior to them. the use of proper Human Resources techniques is a really powerful way for organizations to overcome these challenges. and it is certain that new challenges will never cease to emerge. 41 . competitive environment of today only if they capitalize on the full potential of each employee. challenges do not cease for the HRM. and to improve not only their quantitative goals but also their organizational culture. and their qualitative. many companies have not understood the importance of the human capital in successful operations.
The 42 .Current trends in HR Human resource management is a process of bringing people and organizations together so that the goals of each other are met.
Indian organizations are also witnessing a change in systems. Nowadays it is not possible to show a good financial or operating report unless your personnel relations are in order. There is a need for multi skill development. R 1.role of HR manager is shifting from that of a protector and screener to the role of a planner and change agent. Functions of H. Performance Evaluation and Management 43 . Personnel directors are the new corporate heroes. Over the years. highly skilled and knowledge based jobs are increasing while low skilled jobs are decreasing. Recruitment & Selection 2. Role of HRM is becoming all the more important. This calls for future skill mapping through proper HRM initiatives. Training and Development (People & Organization) 3. The name of the game today in business is personnel. management cultures and philosophy due to the global alignment of Indian organizations.
Record keeping of all personal data. 8. Industrial and Employee Relations 7. bonuses etc in liaison with Payroll 9. pensions.4. Compensation. Career development “Performance Appraisal” – A Systematic Approach 44 . Confidential advice to internal 'customers' in relation to problems at work 10. Redundancy 6. Promotions 5.
“Performance Appraisal” is a part of career development. also known as employee appraisal. 4. etc. no matter how well designed and appropriates the performance planning and appraisal system is. Document criteria used to allocate organizational rewards.“Performance Appraisal”. “Performance Appraisal” is a management tool which is helpful in motivating and effectively utilizing human resources. disciplinary actions. Give feedback on performance to employees. 2. the aims of a “Performance Appraisal” are to: 1. 3. Form a basis for personnel decisions: salary increases. Provide the opportunity for organizational diagnosis and development. quantity. 6. Identify employee training needs. Facilitate communication between employee and administration 7. “Performance Appraisal”s are regular reviews of employee performance within organizations. 5. Assessment of human potential is difficult. promotions. the “Performance Appraisal” system should: 45 . Generally. cost and time). Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. is a method by which the job performance of an employee is evaluated (generally in terms of quality.
Linking the rewards with achievements. . take care of organizational as well as individual needs. Feedback is an important component of “Performance Appraisal”. be correlated with the organizational mission. negative feedback often meets with resistance unless it is objective.suggesting appropriate person-task matching and career plans. THE PROCESS OF PERFORMANCE APPRAISAL 46 . . While positive feedback is easily accepted. cover assessment of performance as well as potential for development.generating information for the growth of the employee as well as of organization. philosophies and value system. and help in creating a clean environment by . based on a credible source and given in a skilful manner.
It also helps in reviewing various factors which influence performance.(a) “Performance Appraisal” System: The Process “Performance Appraisal” involves an evaluation of actual against desired performance. Managers should plan performance 47 .
and assess their performance and achievement in the job. These measures should be under the control of the employees being appraised. There are various methods available for assessing results. These methods can be used according to the particular circumstances and requirements. The methods for assessing performance should be decided next. including financial. In doing so. Craig. (ii) Communicating Job Expectations 48 . Beatty and Baird (1986) suggested an eight-stage “Performance Appraisal” process: (i) Establishing Standards and Measures The first step is to identify and establish measures which would differentiate between successful and unsuccessful performances. Basically. they should keep the goals of the organization in mind and aim at optimal utilization of all available resources. management wants to: know the behavior and personal characteristics of each employee.development strategies in a structured manner for each employee. behavior and personal characteristics of an employee. “Performance Appraisal” is a multistage process in which communication plays an important role.
The best way to effectively monitor is to walk around. judgment and analysis of data. (iii) Planning In this stage. Even though performance is appraised annually. recalling. arranging for the resources to be available which are required for attaining the goals set. thus creating continuous contacts. it has to be managed 'each day. evaluating. which can then be solved promptly. providing first-hand information. This is an enabling role. all year long. This is like putting together an appraisal record. (vi) Feedback 49 . (v) Appraising This stage involves documenting performance through observing. written communication. (iv) Monitoring Performance “Performance Appraisal” is a continuous process.The second step in the appraisal process is communicating to employees the measures and standards which will be used in the appraisal process. Such communication should clarify expectations and create a feeling of involvement. the manager plans for the realization of performance expectations. and It should involve providing than removing obstacles rather interfering. and identifying problems. involving ongoing feedback.' Monitoring is a key part of the “Performance assistance as Appraisal” necessary process.
Such opportunities can also act as incentives or rewards to employees. problem solving.After the formal appraisal stage. demotion). The outcome of an appraisal system should also be used for career development. negotiating. This session should involve verbal communication. a feedback session is desirable.' or professional development. This can be done by supporting participation in professional conferences or by providing opportunities for further study.) and punishments (e. conflict resolution and reaching consensus.g. The ESSENTIALS of an effective performance system are as follows: 50 .. promotion. (vii) Decision Making On the basis of appraisal and feedback results. listening. incentives. (viii) Development of performance The last stage of “Performance Appraisal” is 'development of performance. various decisions can be made about giving rewards (e.. by providing opportunities for upgrading skills and professional interactions. etc.g. compromising.
fair and objective. and do not elicit much useful information. WHAT SHOULD A PERFORMANCE SYSTEM BE? 51 . Documentation – means continuous noting and documenting the performance. motivating. Long and complicated formats are time consuming. time bound and measurable. It also helps the evaluators to give a proof and the basis of their ratings. achievable. difficult to understand. Practical and simple format .The appraisal format should be simple. easy to understand. clear. Standards / Goals – the standards set should be clear.
Correlated with the organization's philosophies and mission Cover assessment of performance as well as potential for development Look after the needs of both the individual and the organization Help create a clean environment Rewards linked to achievements Generate information for personnel development and career planning suggesting appropriate person-task matching HOW CAN THE “PERFORMANCE APPRAISAL” SYSTEM HELP? Promote better understanding of an employee's role and clarity about his or her functions 52 .
Give a better understanding of personal strengths and weaknesses in relation to expected roles and functions Identify development needs of an employee Establish common ground between the employee and the supervisor Increase communication Provide an employee with the opportunity for self-reflection and individual goal setting Help an employee internalize the culture. This helps develop an identity with and commitment to the organization and prepares an employee for higher-level positions in the hierarchy Assist in a variety of personnel decisions APPROACHES IN “PERFORMANCE APPRAISAL” Intuitive Self-appraisal Group 53 . norms and values of the organization.
Trait Achievement of results TECHNIQUES OF “PERFORMANCE APPRAISAL” Easy appraisal method Graphic rating scales 54 .
Behaviorally anchored rating scales .Assessment centers “PERFORMANCE APPRAISAL” SYSTEMS 55 . Field review method Forced choice rating method Critical incident appraisal method Management by objectives Work standard approach Ranking methods methods Alteration ranking .Paired comparison .Person-to-person rating .Checklist .
discrimination to reward managers who are excellent in staff assessment and development Marginal performers receive promotions or salary increases Appraisal forms management fails not completed Managers com plain about time needed System seen as belonging to the designers. accusations of bias. not the users Personnel/HR specialists take enforcer not adviser role system revised frequently Deciding what to Appraising Using the results Recognizing how 56 . behaviorally Top management actually uses Implement “Performance Appraisal” using Disagreement Top on ratings Official review changes ratings Appeals.PROBLEMS Measurement evaluate Judgement performance Policy of the appraisal Organization managers work and the organization culture SYMPTOMS Ambiguity in roles and responsibilities of each job Job performance is difficult to quantify No clear statement of overall objectives of units or the organization Appraisal contains only numerical indices POTENTIAL CURES Job analysis and credible job description Observable. grievances.
30.10 billion (US$ 77 billion) at December 31. 2008. 3. Outcomes of each job identified Overall goals set for units and the organization Train managers to make documented judgements based criteria Performance time rater training and practice Effective communication of performance expectations “Performance Appraisal” itself the Performance Management (PM) documented over Polices for “Performance Appraisal” consistently applied performancecontingent reward system operates ICICI BANK – company profile Overview ICICI Bank is India's second-largest bank with total assets of Rs.14 billion for the nine months ended December 31. 57 .744. 2008 and profit after tax Rs.
The Bank currently has subsidiaries in the United Kingdom. ICICI Bank's 58 . ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking. branches in United States. venture capital and asset management. Malaysia and Indonesia. Bangladesh. Thailand. Singapore. Russia and Canada. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates. Our UK subsidiary has established branches in Belgium and Germany.The Bank has a network of 1.644 ATMs in India and presence in 18 countries. Hong Kong. History ICICI Bank was originally promoted in 1994 by ICICI Limited. an Indian financial institution.438 branches and about 4. South Africa. and was its wholly-owned subsidiary. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998. Bahrain. China. life and non-life insurance. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000. Sri Lanka.
and would create the optimal legal structure for the ICICI group's universal banking strategy. and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities. In 1999. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry. ICICI was formed in 1955 at the initiative of the World Bank. In the 1990s. the Government of India and representatives of Indian industry. seamless access to ICICI's strong corporate relationships built up over 59 . both directly and through a number of subsidiaries and affiliates like ICICI Bank. greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. and the move towards universal banking. ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE.acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001. ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services.
Anupam Puri Mr. Narendra Murkumbi Dr. Mittal Mr. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. and access to the vast talent pool of ICICI and its subsidiaries. higher market share in various business segments. and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. with ICICI Bank. Sridar Iyengar Mr. M. Board Members Mr. by the High Court of Gujarat at Ahmedabad in March 2002. Lakshmi N. K. the ICICI group's financing and banking operations.S. Chairman Mr.five decades. Consequent to the merger. Anup K. Ramachandran 60 . particularly fee-based services. have been integrated in a single entity. Kamath. Pujari Mr. entry into new business segments. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries. In October 2001. V. both wholesale and retail.
Kamath Mr. M . Sharma Mr. P. Executive Director & CFO Board Committees Audit Committee Mr. M. Narendra Murkumbi Mr. Chanda Kochhar. M. Sharma Mr. K. Sandeep Bakhshi. Chanda Kochhar 61 . Sridar Iyengar Mr. K. Vijayan Mr. Kannan. K. Subrahmanyam Customer Service Committee Mr. Sinha Prof. Kamath Mr. Subrahmanyam Mr.M. S. Chanda Kochhar Credit Committee Mr. Marti G. Executive Director Mr. V. Sharma Board Governance & Remuneration Committee Mr. Executive Director Mr.K. Prem Watsa Ms. T. Managing Director & CEO Mr.S. Ramkumar. Kamath Mr. Sharma Mr.K. Sinha Ms. K. K. P. M. Marti G. M. Sharma Mr. Sinha Ms.K. M. Narendra Murkumbi Mr.Mr. Sonjoy Chatterjee.M. Narendra Murkumbi Mr. K. Sinha Prof. N. Anupam Puri Mr. V. V. P. M. V. P. Executive Director Mr.
V. Narendra Murkumbi Ms. Narendra Murkumbi Mr. Marti G. Sandeep Bakhshi Mr. S. Kamath Mr. S. K. Sandeep Bakhshi Share Transfer & Shareholders'/ Investors' Grievance Committee Mr. N. Kannan 62 . Sonjoy Chatterjee Mr. Chanda Kochhar Mr. Kamath Mr. Sridar Iyengar Prof. M. K. K. N. Sharma Mr. Subrahmanyam Mr. V.Fraud Monitoring Committee Mr. Chanda Kochhar Committee of Directors Ms. Sharma Mr. V. Chanda Kochhar Mr. Ramkumar Mr. M. Prem Watsa Ms. Kannan Risk Committee Mr. K. K.
Extra Mile for ICICI bank ICICI Bank 2009 ICICI Bank bags the “Best bank in SME financing (Private Sector)” at the Dun & Bradstreet Banking awards 2009. ICICI Bank's Rural Micro Banking and Agri-Business Group win WOW Event & Experiential Marketing Award in two categories . ICICI Bank's Germany Branch has been certified by “Stiftung 63 Campaign' and 'Talkies on the move campaign' . ICICI Bank NRI services win the “Excellence in Business Model Innovation Award” in the eighth Asian Banker Excellence in Retail Financial Services Awards Programme. These awards were given for Cattle Loan 'Kamdhenu respectively.“Rural Marketing programme of the year” and “Small Budget On Ground Promotion of the Year”.
ICICI Bank is ranked 2nd amongst 57 savings products across 19 banks ICICI Bank Germany won the yearly banking test of the investor magazine €uro in the “call money”category.Warrentest”. The scope of certification comprised processes around consulting and capability building on methods of quality & improvements. The other awards have been bagged for the third year in a row. ICICI Bank has been awarded the following titles under The Asset Triple A Country Awards for 2009: • Best Transaction Bank in India • Best Trade Finance Bank in India • Best Cash Management Bank in India • Best Domestic Custodian in India ICICI Bank has bagged the Best Cash Management Bank in India award for the second year in a row. ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen Keller Centre's Fifth Annual Luncheon in Toronto. 64 . The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence and Excellence Award for Asia Pacific for its Business Intelligence functions. ICICI Bank's Organizational Excellence Group was recently awarded ISO 9001:2008 certification by TUV Nord. The award was given to ICICI Bank its long-standing support to this unique training centre for people who are deaf-blind.
to processing housing. the functions of HR professionals have been recognised as essential. train 65 . are carried out without much recognition. leading organisations would do well to recognise the human potential that can be unleashed by adopting effective human resource management strategies that realise the potential of employees and earn their respect and loyalty. and organisations are competing to secure talent from the same pool. Essentially. and is. From hiring workers and providing transportation and meals services. Dealing with the mundane personal matters of corporate life has traditionally been seen as the sole purpose of the HR department. these hard working professionals are often relegated to small back offices where their activities. where every competitive edge counts. changing. viewed as little more than administrative functions. but have not always inspired respect for those involved in executing them. people remain the strongest and most competitive assets of a business. investing in and revering effective HR departments to find. But in an increasingly aggressive corporate world.Needs and Importance For “Performance Appraisal” in Banking The butt of many a corporate joke. medical and insurance benefits. This should. In a region where business growth is rapid.
66 . But can everyone be persuaded to take real action in developing their HR departments Banking industry is facing a cut throat completion in present banking scenario where the motivation of the employee can be a competitive advantage to retain its customer.and help retain this talent is increasingly important. Testament to the fact many banks in the region are now recognising the value of developing their human resources.the annual conference and exhibition for industry professionals. Abu Dhabi recently hosted the Middle East Human Resource Summit .
The evaluation may provide ideas for refining established practices or instituting new ones.g.“Performance Sector Appraisal” In Banking “Performance Appraisal” is a vehicle to (1) validate and refine organizational actions (e. selection. appraisal data may show that a farm supervisor has had a number of interpersonal conflicts with other managers and employees. Validating and refining organizational action or banks action Employee selection. Data from “Performance Appraisal”s can also help farmers 67 . For instance. training and just about any cultural or management practice—such as the introduction of a new pruning method or an incentive pay program—may be evaluated in part by obtaining worker performance data. and (2) provide feedback to employees with an eye on improving future performance. or (3) Providing the supervisor one-on-one counseling. training). (2) Encouraging present supervisors to attend communication or conflict management Classes at the local community college. Some options include (1) Paying more attention to interpersonal skills when selecting new supervisors.
but it may take years to obtain significant data trends. Useful performance data may still be collected when employees are evaluated singly. (3) Set up an employee counseling session. (2) give pay raises or other rewards.(1) Plan for long-term staffing and worker development. or (4) Institute discipline or discharge procedures. Employee need for feedback 68 . it is easier to evaluate performance data when large numbers of workers are involved such as in banks. For validation purposes.
"can happen only within the context of listening to and caring about the person. such as the percentage of plant grafts 69 . good-will deposits. supervisors who tend to look for worker’s positive behaviors— and do so in a sincere. Such constructive feedback." In general. "I feared you would stop working as hard. along with his immigrant family. workers will often be grateful for information on how to improve shortcomings. These are. without which withdrawals cannot be made. Qualitative comments are descriptive. generally workers want to know how well they are performing. non-manipulative way—will have less difficulty giving constructive feedback or suggestions. but requires introspection on the part of the individual being evaluated. In contrast." People need positive feedback and validation on a regular basis. Once an employee has been selected. the burden for performance analysis does not fall on the supervisor alone.Although employees vary in their desire for improvement. A successful farmer recalled with sadness how as a youth he had worked very hard. such as telling the shop mechanic you appreciate the timeliness and quality of her repairs. few management actions can have as positive an effect on worker performance as encouraging affirmation. for a farmer who never seemed to notice the effort. Years later he met the former employer and asked why he had never made any positive comments about their work. however. The response from the former boss was. in the negotiated approach. When presented in a constructive fashion. This does not mean you should gloss over areas needing improvement. in effect. quantitative feedback is based on numerical figures. Feedback may be qualitative or quantitative. Furthermore.
Objectives Of Performance appraisal: 70 . performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees.that have taken. Some researchers feel feedback is particularly useful when workers have an achievement objective By focusing the attention on performance.
training and development.• To review the performance of the employees over a given period of time. To judge the performance. gap between the actual and the desired • • • To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. To reduce the grievances of the employees. To provide feedback to the employees regarding their past performance. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment. • • • • • • 71 . To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. selection. Provide information to assist in the other personal decisions in the organization.
Followings should kept in the mind for effective “Performance Appraisal” in a bank Select what performance data to collect Determine who conducts the appraisal Decide on a rating philosophy Overcome rating deficiencies Create a rating instrument Deliver useful information to employees The “Performance Appraisal” or review is essentially an opportunity for the individual and those concerned with their performance in the bank . It should not be a top down process or an opportunity for one person to ask questions and the other to reply. But to be successful they should also be used as a basis for making development and improvement plans and reaching agreement about what should be done in the future to enhance the bank’s effect and effectiveness. 72 . most usually their line manager . It should be a free flowing conversation in which a range of views are exchanged. “Performance Appraisal”s usually review past behavior and so provide an opportunity to reflect on past performance of the bank employees.to get together to engage in a dialogue about the individual’s performance. development and the support required from the manager.
The “Performance Appraisal” is often the central pillar of performance management in the bank to keep the motivation of the employees high. 73 .
One tool for monitoring performance management is “Performance Appraisal” that the banks use for rewarding its employees. standards and performance indicators. Key areas of the framework to be agreed are objectives.“Performance Appraisal” And Performance Management In ICICI Bank • The facilitation of high achievement by employees. performance management is usually known as company performance and is monitored through business appraisal. Performance management can be coordinated by an interrelated framework between manager and employee. 74 . For successful performance management in ICICI . human resource management. and means of reward. a culture of collective and individual responsibility for the continuing improvement of business processes needs to be established. For the bank. Performance management involves enabling people to perform their work to the best of their ability. and individual skills and contributions need to be encouraged and nurtured as the bank deals in service sector where the employees are the main factor of making the difference . meeting and perhaps exceeding targets and standards.
Reasons for “Performance Appraisal” in ICICI Increase motivation to perform effectively Increase staff self-esteem Gain new insight into staff and supervisors Better clarify and define job functions and responsibilities Develop valuable communication among appraisal participants Encourage increased self-understanding among staff as well as insight into the kind of development activities that are of value Distribute rewards on a fair and credible basis Clarify organizational goals so they can be more readily accepted Improve institutional/departmental manpower planning. test validation. and development of training programs 76 .
Employee performance is linked to the bank’s performance. and others have adopted a “Performance Appraisal” model in which best-to-worst ranking methods are used to identify poor performers. its commitment to the organizational goals and investments made to attract train and retain superior human capital. Effective banks are not build merely on investment and returns but more on the quality of the workforce.A A growing number of front running banks like ICICI. But the flip side of this strategy is that employees become too competitive and team spirit is not nurtured. Advocates of this system feel that it continually motivates employees to better their performance since nobody would like to be included in the poor performance band. If the employee refuses to leave then his service is terminated and no compensation is offered. In cases where the employee fails to improve his performance he is asked to leave the organization gracefully and a severance package is offered to him. An integrated Performance Management system is essential to get the best out of its people. The identified poor performers are then given a time period during which they have to show an improvement in their performance. This helps in achieving the organizational goal and creates a performance culture in 77 .Modern Trends In Banks for P. This system is called “rank and yank strategy”.
Employees act as one bank one brand. Invention.the bank. diversity of perspectives is fostered. creativity. 78 .
achievable. At the end of a specified time period.ICICI BANK PEFORMENCE APPRAISAL ENVIRONMENT The bank is using the Management by Objectives (MBO) method. It facilitates guidance and counseling. Each employee becomes aware of the task he has to perform in the bank. measurable. the goals are modified or redesigned for the next period of time. 79 . It provides guidelines for self evaluation as well as evaluation by the superior against set tasks and goals. The goals are finally set and are action oriented. Depending on the performance of the subordinate. It promotes better communication and information sharing. review able and time bound and most importantly they use to be aligned with the goal of the organization. It establishes a link between the performance of the individual and the bank It is easy to implement because those who carry out the plan also participates in setting it up. This leads to better utilization of capacity and talent. The goals set are specific. In this method the subordinate in consultation with the supervisor chalks out short term objectives followed by specific actions that he has to carry out. A well thought out MBO system provides multiple benefits. the activities are jointly reviewed by both the subordinate and his supervisor. The MBO is thus a performance oriented system.
The Effective Components of ICICI P . Observation and Documentation “Performance Appraisal” Meetings Performance Diagnosis and Coaching An effective “Performance Appraisal” system in ICICI bank emphasizes individual objectives. improve efficiency and effectiveness serve as a mechanism of control and provide a rational compensation structure. Bank objectives and also mutual objectives. From the viewpoint of individual objective the “Performance Appraisal” talks about a) b) c) What How How task well can the the his individual individual performance is has be expected done further to the do? task? improved? d) His reward for doing well. 80 .A System Performance Planning (includes employee goal setting / objective setting) Ongoing Performance Communication Data Gathering. In short the appraisal system establishes and upholds the principle of accountability in the absence of which bank failure is the only possible outcome. From the bank view point a “Performance Appraisal” should generate manpower information.
the emphasis is on growth and development. talking about mutual goals. effectiveness and profitability of the bank 81 .Finally. harmony.
Included here is also one other factor that is not a direct objective of appraisals. Secondly. asking for input from peers. but becomes a valuable asset within itself. and communicate objectives more accurately to workers . The annual “Performance Appraisal” is usually done in two steps. and salaries). it is a formal structure that allows for the continued measuring and evaluation of individual behavior and performance. is not only to measure the performance of human resources but also to find areas of skill deficit for further development (through employee feedback). the employees and their manager complete the “Performance Appraisal” form . This simply is the provision for maintaining records of workers that are legally viable. 82 . whilst influencing an employees job related attributes through such factors as increased job satisfaction and recognition (with the use of promotional aids such as better equipment.A “Performance Appraisal” is one such method that allows for the optimisation of employees. identify excess potential that could be better utilized.doing a self assessment. businesses move one step closer to the achievement of their set goals and objectives.ICICI HR Philosophy on P. Often the bank also uses a 60 degree feedback process. This is especially important in today’s society because of the "increasing legislation and regulation dealing with victimization and discrimination" making bank liable for all their actions. The purpose of any such system. duties. In a broad sense . By doing so. First. that can protect the business when dealing in cases of dismissals and demotions.
score is averaged and merit raise (if applicable) 83 . exceeds or does not meet standards). Once appraisal is complete. used in the first step. which can be excellent.the bank employees and manager participate in a formal “Performance Appraisal” interview. average. For example. what are the skills necessary to perform a complete blood count? The criteria are used to determine the level of performance. consists of performance standards and criteria that are used to judge evaluate your performance.The performance standards are derived from a job analysis. or poor (or alternatively meets. The appraisal form. The items comprising your job description are usually the performance standards that are used in employees annual appraisal . which is a detailed list of all of the skills involved in performing a task.
g. 84 . without numerical rankings. Includes a weighted average calculation. 2. General “Performance Appraisal” Form III Two-page "short form" has numerical rankings for two sections: a) general work attributes and b) managerial attributes. General “Performance Appraisal” Form II Four-page form has three sections: a) overall performance. 360-Degree “Performance Appraisal” Form II Two-page form for peers and outsiders .all open-ended questions. 360-Degree “Performance Appraisal” Form I Two-page form for peers. outside suppliers and customers to fill out. b) current job duties (which are customizable). 5. b) communication skills. 4. Also can be used for "upwards" feedback about managers. maturity. vision).. and c) people/self development skills. General “Performance Appraisal” Form I Six-page form includes evaluation sections for three categories: a) objectives from last review period. and c) organization core values (e.A 1.Forms Used By The Bank For P. 3.
6. Manager “Performance Appraisal” Form Six-page form with all sections related to managerial skills. Also includes a section for listing future objectives. 7. Administrative/Technical “Performance Appraisal” Form Four-page form perfect for administrative, technical and customer service workers. 8. Sales “Performance Appraisal” Form Five-page form focused on sales personnel. Includes four sections: a) actual vs. plan performance, b) lead generation, c) selling skills and d) account maintenance. 9. Project Evaluation Review Form Four-page form geared towards specific projects, and an individuals' role on a given project. 10. Employee Self-Assessment Form Two-page open-ended form for an employee to fill-out before his or her own review. Sections include: a) success in meeting goals from last review, b) accomplishments and c) areas for improvement.
Approaches And Techniques In “Performance Appraisal” Used By The Bank “Performance Appraisal” is a multistage process involving several activities, which can be administered using a variety of approaches. Some of these approaches are being used by the banks for “Performance Appraisal” Intuitive Approach: In this approach, a supervisor or manager judges the employee based on their perception of the employee's behavior. Self-Appraisal Approach: Employees evaluate their own
performance using a common format. Group Approach: The employee is evaluated by a group of persons. Trait Approach: This is the conventional approach. The manager or supervisor evaluates the employee on the basis of observable dimensions of personality, such as integrity, honesty, dependability, punctuality, etc. Appraisal Based On Achieved Results: In this type of approach, appraisal is based on concrete, measurable, work achievements judged against fixed targets or goals set mutually by the subject and the assessor.
Behavioral Method: This method focuses on observed behavior and observable critical incidents.
they have application in a wide variety of job responsibilities and are more consistent and reliable in comparison with essay appraisal. etc. essay ratings are difficult to compare. each with some strong points as well as limitations. Oberg (1972) has summarized some of the commonly used “Performance Appraisal” techniques. adaptability. (i) Essay Appraisal Method: The assessor writes a brief essay providing an assessment of the strengths. The utility of this technique can be enhanced by using it in conjunction with the essay appraisal technique. communication skills. Although graphic scales seem simplistic in construction. it is necessary that the assessor knows the subject well and should have interacted with them. weaknesses and potential of the subject. outstanding.Appraisal techniques There are several techniques of “Performance Appraisal”. or unsatisfactory). such as reliability. (iii) Field Review Method 88 . In order to do so objectively.' Assessment could also be trait centered and cover observable traits. above average. (ii) Graphic Rating Scale A graphic scale 'assesses a person on the quality of his or her work (average. Since the length and contents of the essay vary between assessors.
These statements are weighted or scored in advance to assess the employee. systematically identifying areas of inter-assessor disagreement. The scores or weights assigned to the individual statements are not revealed to the assessor so that she or he cannot favor any individual. To overcome this assessor-related bias. this technique is of little value wherever “Performance Appraisal” interviews are conducted. (iv) Forced-Choice Rating Method Unlike the field review method. (v) Critical Incident Appraisal Method In this method. 'a member of the HRM staff meets a small group of assessors from the supervisory units to discuss each rating.' It can then be a mechanism to help each assessor to perceive the standards uniformly and thus match the other assessors. Although this technique has several variations. giving details of both positive and negative behavior of the employee. it is very time consuming. Although field review assessment is considered valid and reliable. The discussion focuses on actual 89 . In this way. These are then discussed with the employee. essay and graphic rating techniques can be combined in a systematic review process. they inadvertently introduce bias in their ratings.Since individual assessors differ in their standards. However. the forced-choice rating method does not involve discussion with supervisors. In the field review method. the most common method is to force the assessor to choose the best and worst fit statements from a group of statements. a supervisor describes critical incidents. the assessor bias is largely eliminated and comparable standards of performance evolved for an objective.
While this technique is well suited for performance occur. (vii) Work Standard Approach In this technique. “Performance Appraisal” and interview comments are related to these duties. a mistake or good display of initiative. Even though the employees are consulted. This avoids the feeling among employees that they are being judged by unfairly high standards. feedback employees. However. it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. It makes little sense to wait six months or a year to discuss a misdeed. management establishes the goals openly and sets targets against realistic output standards. This method is currently widely used. In some cases employees may not like 'selfdirection or authority. These standards are incorporated into the organizational “Performance Appraisal” system. but not always in its true spirit.behavior rather than on traits. That review may interviews. This limitation can be overcome by some form of ranking using pooled judgment. 90 . This makes the appraisal process objective and more accurate. in many cases management ends up by imposing its standards and objectives.' To avoid such problems. Thus each employee has a clear understanding of their duties and knows well what is expected of them. (vi) Management By Objectives The employees are asked to set or help set their own performance goals. the work standard approach is used. it has and the may drawback delay that the to supervisor has to note down the critical incidents as and when they be impractical.
The evaluations received by each person in the group are counted and turned into percentage scores. The alteration ranking method usually involves rating by more than one assessor. While this is a simple method. 91 . Every individual in the group is compared with all others in the group. In addition. and Monga. based on Oberg.(viii) Ranking Methods: Some of the important forms of ranking for “Performance Appraisal” are given below. Other employees are then ranked against this employee in descending order of comparative performance on a scale of best to worst performance. 1972. it is impractical for large groups. there may be wide variations in ability between ranks for different positions. The scores provide a fair idea as to how each individual in the group is judged by the assessor. 1983: (a) Alteration Ranking Method The Individual With The Best performance is chosen as the ideal employee. The ranks assigned by each assessor are then averaged and a relative ranking of each member in the group is determined. (b) Paired Comparison: ranking and The enables paired better comparison comparison method among systematizes individuals to be rated.
the names of the actual individuals known to all the assessors are used as a series of standards. These standards may be defined as lowest. adaptability and reliability. middle. who has to check as many items as she or he believes describe the worker being assessed. Each assessor constructs their own person-to-person scale which makes comparison of different ratings difficult. These qualities may refer to inter-personal relationships. Individual employees in the group are then compared with the individuals used as the standards. 1983). planning and organizing abilities. (e) Behaviorally Anchored Rating Scales (BARS): This is a relatively new technique. These statements are developed from critical incidents collected both from the assessor and the subject. The advantage of this rating scale is that the standards are concrete and are in terms of real individuals. and rated for a standard where they match the best. (d) Checklist Method: The assessor is furnished with a checklist of pre-scaled descriptions of behavior. 92 .(c) Person-to-Person Rating: In the person-to-person rating scales. A final rating is obtained by averaging the scale values of the items that have been marked. low. The scale values of the behavior items are unknown to the assessor. It consists of sets of behavioral statements describing good or bad performance with respect to important qualities. high and highest performers. The disadvantage is that the standards set by different assessors may not be consistent. which are then used to evaluate the personnel being rated (Monga.
For example. The individual whose potential is to be assessed has to work on individual as well as group assignments similar to those they would be required to handle were they promoted. depending on the goals of “Performance Appraisal” in the organization and the type of review. The judgment of observers is pooled and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. Combined graphic and essay form is simple. self-analysis. goal-setting and work standard methods are effective for objective coaching. behavioral methods and result-based techniques. It also involves subjective judgment by observers. management by objectives. 93 . Different approaches and techniques could be blended. effective in identifying training and development needs. A carefully developed and validated forced-choice rating can provide valuable analysis of the individual when considering possible promotion to supervisory positions.(f) Assessment centers: This technique is used to predict future performance of employees were they to be promoted. personality traits. counseling and motivational purposes. Critical incident appraisal is best suited when supervisor's personal assessment and criticism are essential. A “Performance Appraisal” system could be designed based on intuition. and facilitates other management decisions. The final assessment helps in making an order-of-merit ranking for each employee.
it was critical that we establish a tight link between employee performance. which operates commercial banks in Washington. SVP Talent Management.S. and we quickly realized that for this to work. Oregon and Idaho. based Banner Corporation has selected Halogen Software for a Web-based talent management system to streamline the employee “Performance Appraisal” process and tightly integrate learning into its talent management process. Banner Corporation. Banner Corporation.200 employees are executing on the bank's strategic vision and delivering outstanding customer service. "Our number one priority was to improve our learning management processes. talent management and learning functions." 94 . is focused on creating a tightly integrated talent management program. "We really did our homework and selected Halogen based on the fact that it would meet all of our current and future talent management needs." explained Mimi Ellis. Halogen was selected following a review of more than 20 talent and learning management vendors.Banner Corporation Banks on Halogen for Talent and Learning and performance Management (For Practical Understanding) Northwest U. to ensure its 1.
thereby creating a complete talent management strategy across all its locations in the Northwest. International Finance Corporation. 95 . "We are looking forward to continuing to work with Halogen and reaping the benefits of our new approach to talent management. The company 360 offers a complete suite of web-based products (pay that for automate. Banner Corporation Financial is starting Services with and a deployment for of Halogen employee eAppraisal Multi-Rater performance management and plans to build on the implementation with fully integrated Halogen eSuccession and eLMS modules. succession compensation planning and management learning performance)." Banner Corporation joins financial services institutions across North America relying on Halogen. Learning functions. Halogen Software makes powerful. such as compliance training. management. degree feedback. "The Halogen system is straightforward and easy to use." added Ellis. and everyone we've worked with at the company has been wonderful. including AGF. and information from appraisals will be used for succession planning purposes. simplify and integrate employee “Performance Appraisal”s. simple-to-use and affordable employee performance and talent management applications. People's Bank and United Bank and Trust. About Halogen Software A recognized industry leader with over 1000 customers worldwide.The new Web-based system will enable Banner Corporation to automate the employee appraisal process driving consistency across the organization. will be tied into the appraisal process.
financial services and professional services specific suites meet the unique needs of these industries. and has won multiple awards for its corporate leadership and product innovation. commercial real estate. residential. Banner serves the Pacific Northwest region with a full range of deposit services and business.halogensoftware. 96 . Oregon and Idaho. For more information.Halogen's offering makes HR best-practices accessible to companies of all sizes and its healthcare. About Banner Corporation Banner Corporation is the parent company of Banner Bank. construction. Halogen is consistently recognized by the industry and its customers for its exceptional implementation and support services. It is also the parent of Islanders Bank which operates three branch offices in Washington's San Juan Islands. a commercial bank that operates a total of 86 branch offices and 12 loan offices in 29 counties in Washington. agricultural and consumer loans.com . visit www. including HR Technology Product of the Year.
All of the results across the organization 97 . a department.useful products and services for customers inside and outside the bank and organization. that systems and processes in the organization be applied in the right way to the right things: to achieve results. strong commitment and lots of hard works alone are not results. employees. Recently. Performance management redirects our efforts away from busyness toward effectiveness. Everyone (and everything) in the organization must be doing what they're supposed to be doing to ensure strategies are implemented effectively. etc Performance management reminds us that being busy is not the same as producing results. banks. The major contribution of performance management is its focus on achieving results -. It reminds us that training. Increasing competition from businesses across the world has meant that all businesses must be much more careful about the choice of strategies to remain competitive. management can focus on performance of the organization. Performance Performance management includes activities to ensure that goals are consistently met effective efficient manner. processes to build a product or service.Conclusion To summarize our discussion we can say that the “Performance Appraisal” is an integral part of performance management and has become being the in important an component and of the HRM. This situation has put more focus on effectiveness. organizations have been faced with challenges like never before.
bank • • know and understand what is expected of them have the skills and ability to deliver on these are supported by the organization to develop the expectations • capacity to meet these expectations are given feedback on their performance • have the opportunity to discuss and contribute to individual and team aims and objectives. Only then it be said that the organization and its various parts are really performing. On going banking scenario has changed the scope of the performance management system as the competition is extensive and to retain the employees has become the challenging task for the management.it is about broader issues and longerIntegrated . We can say that Performance management should be: • Strategic . With the help of “Performance Appraisal” the bank 98 .it should link various aspects of the term goals • business. A well designed “Performance Appraisal” system helps an organization. people management.must continue to be aligned to achieve the overall results desired by the organization for it to survive and thrive. and individuals and teams.
potential development. compensation etc. career development. recruitment. selection.can recognize its true personnel inventory and formulate the strategy for man power planning and career development. To wind up our discussion we can say that “Performance Appraisal” is an integrated and widen approach to guide the employees in the right direction to achieve organizational as well as individual objectives mainly in banking sector because of the dominancy of personal skill and service level to interact with the customers 99 . “Performance Appraisal” directly affects the other sub system of HRM such as manpower planning.
Suggestion and recommendation Though it is the basic rule of the report writing that suggestion and recommendation should not be given until it’s asked for but to keeping in the mind the academic nature of the report we would like to recommend the followings o Management and employees should see “Performance Appraisal” o Banks as a positive tools to determine the of organizational efficiency and effectiveness should use a well communicative method “Performance Appraisal” to avoid any resistance from the employees o The outcome of the “Performance Appraisal” should be shared with the concerned employees and corrective action should be taken in the light of the outcome o “Performance Appraisal” should be treated as an integral part of the organizational development not just the formality o If the external agency is hired for “Performance Appraisal” . it will be appreciated to remove the possibility of biasness o “Performance Appraisal” should be done on both basis qualitative an quantitative o There should be a cost and benefit study of “Performance Appraisal” process 100 .
Corporate bulletin and finance magazine 4.Bibliography 1.Internal report of banks 3.Personal sources 101 .Books and journals 2.Internet and bank’s website 5.
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