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Case 6: Appraisal Apprehensions

Siddhartha Sankar Bor a (34047)

Situational Analysis
Sanjana Singh is the newly appointed vice-president (HRD) at Readymaid Foods, a processed food manufacturer. She has just taken over from Mr. Sunil Purohit, the outgoing vice-president. She is a highly-educated, well-experienced and ambitious human resources development professional. As the first major challenge before her, she has to deal with a delicate situation involving the performance appraisal practices followed in the organization. The organization has adopted different performance appraisal systems in the past, e.g. trait theory based approach in 1970s, management-by-objectives (MBO) method in the 1980s, SMART method and the Management review. All these methods had their own successes and failures. With each method, there is a growing degree of participation in the sense that more people are involved in the process. However, the recently introduced 360-degree appraisal has been a paradigm shift. It has enabled the subordinates to provide feedback about their bosses and remain anonymous. Though some managers found it quite helpful to increase their performance, some took offense in the anonymity of the feedbacks and wanted to know the names of the participants.

The objective before Sanjana Singh is to provide the organization with a performance appraisal system that will be fair, acceptable to most of the people in the organization and also transparent. Most importantly, it should be in the best interests of the organization.

Problem Identification
The problem has different dimensions. The earlier appraisal methods have failed because it was not in sync with the organizational culture. All the older methods were following a top-down appraisal procedure and managers always had their discretion in appraising a subordinate. However, the new methods have become increasingly participative and some managers have felt that it has undermined their authority. In the 360-degree appraisal system, some managers such as Surajit Roy might find it insulting to get a poor feedback from his inferiors. This has raised questions about the hierarchy of power in the organization. There is also a demand for transparency in the system. The question is what should be the level of transparency such that a fair appraisal can be ascertained. Sanjana Singhs ambition to stand apart from her predecessor will also play an important role.

Decision Making
The decision should fulfil the following criteria, 1. A fair system of performance appraisal should be guaranteed.

2. Transparency should be maintained to the level that it should not stop a subordinate from submitting feedback about his boss honestly. 3. It should ensure greater participation. 4. It should be acceptable. 5. It must not stir discontent among any section of the employees. 6. Organizational hierarchy should be maintained.

Generating Alternatives
There are several alternatives for Sanjana Singh. 1. To revert back to the old trait theory based approach. 2. Giving another try at MBO system. 3. Retain the 360-degree appraisal system, listen to different criticisms, and make some modifications to address the concerns 4. Invent a new performance appraisal system herself and implement it. Name it Sanjana Performance Appraisal System. Also, publish an article about the new system in a reputed journal.

Evaluation of each alternative

To pursue the first alternative will be a regressive measure as it is an archaic system and it was used at a time when the sub-ordinates were given no voice. It might be acceptable for some managers as they will have more discretion, but it would not be in the best interest of the organization. Reverting to MBO approach will again prove detrimental as it was already proved to be not suitable. It will place an unnecessary burden on the employees. The third approach seems viable. But for this all the concerns that are raised against the 360-degree appraisal system must be addressed. The main concern is preserving the hierarchy in the organization. It is felt that giving the subordinate the power to decide on a superiors performance is against organizational hierarchy. But it is not actually the case. The operational decisions are always at the top management. It can decide whatever it wants to do with the appraisal data obtained. But giving the subordinates some sort of say in the form of feedback motivates them to feel empowered and they start to feel that they belong to the organization. Also, transparency can be brought. But it will be unwise to reveal the names as it will prevent the employee from giving negative feedback about his boss in fear of repercussions. The last option serves the personal interests of Sanjana Singh. But they are not in the interest of the company. From the historical information we have seen that the improvements in the performance appraisal system have always been incremental and making a sudden departure from the established norm will invite disaster.

Selection of the best alternatives

From the analysis outlined above, it becomes clear that the third option is desirable. It is a status quo approach. The 360-degree appraisal system should be kept, as many found it useful. The fraction of people that found it undesirable is a minority. She should speak to them and address their concerns by making small modifications.

Implementation Plan
As already outlined, the main concern is the hierarchy and transparency. To solve this, each manager should be consulted while making the questionnaire for evaluation so that he can add the questions that he feels necessary. This way he can know about his performance better and not feel bad about it. This will also bring about transparency. However, disclosing the names of the people is not a good idea as it will affect honesty of the appraisal. A face-to-face discussion should be made optional if the manager under scrutiny desires so. But it should not replace the actual questionnaire based feedback system.

Contingency Plan
If this system does not succeed, the appraisal system should be viewed from a fresh perspective. A careful study should be initiated if the hierarchy is actually breaking down. Then there should be some organizational restructuring in order to facilitate increased performance.