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Project Report




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Roll No: 13101

MBA- IV Sem.




ACKNOWLEDGEMENT ……………………………………..3
DECISION ………………………...............................................

We also received constructive feedbacks from our batch mates and old students of this institution in preparing this case study a relevant one. . the group members are thankful to them. Numerous HR managers and corporate from Gurgaon have given their best of knowledge regarding the subject matter of the case analysis. I am indebted to Charu Gupta for encouraging us to start this project. We. ACKNOWLEDGEMENT Several individuals were extremely instrumental in allowing us to create this case analysis.

which is performed by those directly managing the people. productivity and satisfaction--it is a goal.congruent win . FOUNDATION AND SCOPE What is Performance Management? Systematically managing all the people in an organization. goal focus. INTRODUCTION PERFORMANCE MANAGEMENT DEFINITION. FOUNDATION OF PERFORMANCE MANAGEMENT: Why organizations introduce performance management? The IRS 1998 survey elicited the following reasons from few organizations for introducing performance management: .the HR managers. for plan  Armstrong and Baron define performance management as a “strategic and integrated approach to delivering sustained success to organizations by improving performance of people who work in them and by developing the capabilities of teams and individual contributors  Performance management is that part of an organization’s people-related function.

ORGANISATIONREASONS Akzonoble India ltd Cultural change Gurgaon Quality-providing the Customer with what the Customer want Customer Service .

There are five major groups of interacting factors that determine performance at the corporate level. SCOPE The scope of performance management has expanded to policy and strategy at the corporate level. These are:-  Corporate strategy and objectives  Technology  Organizational structure and system  Human Resource development and  Organizational climate and culture .

 Ownership of performance management by line management rather than the personnel function. THE PERFORMANCE .  Pre-eminence of intrinsic needs of managers without neglecting their extrinsic needs.  Manage-learning linked with organizational goals on the one hand and with career development on the other.commitment management practices is a key managerial responsibility . Key to Performance Management: Building organizational capability and successful implementation of  High .MANAGEMENT CYCLE Plan Review Act Performance Managed Organizations are likely to have the following characteristics:  Measurable performance targets.

and the processes. while time and attention are the scarcest of resources in most organizations  When people (individuals and teams) know and understand what is expected of them. High-performance management practices require consistent leadership attention. and have taken part in forming these expectations. they will use their best endeavors’ to meet them.  The capacity to meet expectations depends on the levels of capability that can be achieved by individuals and teams. systems and resources made available to them by the organization. .

the HR managers. Monitoring. job description must be prepared for each job. The management or superiors have the authority to redesign and reassign an employee’s work based on their assessment of individual and team performance. which is performed by those directly managing the people. What is Performance? Performance is degree of accomplishment of the tasks or how well an individual is fulfilling the job requirements. To this end. Managing this whole process of evaluation is called Performance Management. Quality needed to perform for each job: Based on job descriptions. and Rewarding. the roles to be played people must be prepared. Steps to be followed while Introducing a Good Potential Appraisal System: Role Descriptions: Organizational roles and functions must be3 defined clearly. Appraising. Performance evaluation or Appraisal is the personnel activity by means of which the organization determines the extent to which the employee is performing the job effectively. Developing. . DISCUSSION A full cycle of performance management consists of Planning.

individual differences in performance can make a difference to company performance. . Benefits of performance appraisal: Employer perspective [Administrative uses]  Despite imperfect measurement techniques. Features: When Performance appraisal is implemented correctly.  Documentation of performance appraisal and feedback may be required for legal defense.  Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations.  Appraisal offers a rational basis for constructing a bonus or merit system. it can affect corporate performance and the bottom line. normally including both the quantitative and qualitative aspects of job performance. It mainly involves three steps: a Setting work standards b Assessing employee’s actual performance relative to these standards c Offering feedback to the employee so that he can eliminate deficiencies and improve performance in course of time. It’s a systematic and objective way of evaluating both work related behavior and potential employees. Performance Appraisal: Definition Performance appraisal is a method of evaluating the behavior of employees in the work spot.

Employee perspective [developmental purposes]  Individual feedback helps people to rectify their mistakes and get ahead. including observable physical actions. focusing more on their unique strengths.  Assessment and reorganization of performance levels can motivate employees to improve their performance. movements. Who will appraise?  Supervisors  Peers  Subordinates  Users of services  Consultants  Self-appraisal THE PERFORMANCE APPRAISAL PROCESS: . What is to be appraised? The content to be appraised is determined on the basis of job analysis. Usually it comprises of:  Behaviors.  Traits which are measured in terms of personal characteristics.  Objectives which measure job related results.

 A) Establish performance Standards  B) Communicate the standards  C) Measure actual performance  D) Compare actual performance with standards and discuss the appraisal  E) Taking corrective action. if necessary. .

Methods of Performance Appraisals .


is not possible. by the employee’s immediate superior. It mainly highlights the strengths and weakness of the subordinates. E. The manager maintains logs of each employee. The essay method can be used by evaluators who are superiors. These critical incidents or events represent the outstanding and poor behavior of employees on the job. 2 Essay Evaluation: In Essay technique of evaluation. elaborates on some of the ratings. such as graphic rating.:. Individual Evaluation Methods: 1 Confidential report:- It is a descriptive report prepared. in others. the evaluator is asked to describe the strong and weak aspects of the employee’s behavior. Since the report is generally not made public.Government organizations The report usually has the impression of the superior about the subordinate. 3 Critical Incidence techniques: In this method. or subordinates of the employee to be evaluated. whereby he periodically records critical . generally at the end of every year. the essay method is combined with any other form. rectification of mistakes. the essay summaries the scale. or discusses added dimensions not o the scale. managers prepare lists of statements of very effective and very ineffective behavior of the employee.g. if any. In most of the cases there are guidelines on the topics to be covered. no feedback is available to the appraise. purpose of the essay. In some organization this technique is only one used. In this case. and so on. peers.

4 Checklists and weighted checklists: Another simple type of individual evaluation method is the checklist. In the technique. the rater leaves it blank. the Rater checks the items. A factor analysis of the results indicates that only two traits were being rated: quality of performance and ability to do the present job. If the rater believes that the employee possesses a trait listed. In its simplest form. these recorded critical incidents are used in the evaluation of the workers performance. The ratings can be in a series of boxes. the evaluator places a check above descriptive words ranging from none to maximum. these ratings are then assigned points. 5 Graphic rating scale: The mostly widely used performance evaluation technique is a graphic rating scale. In the latter case. At the end of the rating period. the checklist is a set of objectives or descriptive statements about the employee and his behavior. Typically. A rating score from the checklist equals the number of checks. 6 Behaviorally anchored rating scales: . incidents of the workers behavior. The number of characteristics rated varies from few to several dozen. This method is most likely to be used by superiors than peers or subordinate evaluations. or be on a continuous scale (0-9) or so. the evaluator is presented with a graph and asked to rate employees on each of the characteristics listed. if not.

The primary purpose of the forced choice method is to correct the tendency of a rater to give consistently high or low ratings to all the employees. This is a new. hopefully around 1. the items are evaluated by superiors (often other than those who submitted the items). The two-. three-. Another technique which essentially is based on the critical incident approach is the behaviorally anchored rating scale (BARS). 7 Forced choice method: The forced choice method of evaluation was developed because other methods used at the time led to a preponderance of higher ratings. relatively infrequently used technique. In forced choice.A procedure similar to that for weighted checklists is used to verify the evaluations(outstanding for example) with the smalleststandard deviation.statement items are grouped in a way that the evaluator cannot easily judge which statements apply to the most effective employee. which made promotion decisions difficult. if not . These items are then used to construct the BARS. the supervisor and the employee to be evaluated jointly set objectives in advance for the employee to try to achieve during a specified period. In this system.As with weighted checklists. The method encourages. or four. and personnel specialists group these into categories (5-10 is typical). the evaluator must choose from a set of descriptive statements about the employee. Supervisors give descriptions of actually good and bad performance. 8 Management by objectives (MBO): Another individual method in use now a day is MBO.5 on a 7-point scale.

Here the evaluator is asked to rate the employees from highest to lowest on some overall criterion.requires. The relative position of each employee is expressed in terms of his numerical rank. The evaluation consists of a joint review of the degree of achievement of the objectives. the ranking of an employee in a work place is done against that of another employee. them to phrase these objectives primarily in quantitative terms. then select the next highest and next lowest. In this approach the evaluators pick the top and the bottom employees first. This approach combines the superior and self-evaluation systems. The evaluator then checks the person he feels is the better of the two on a criterion . and move towards the middle. Ranking method: In ranking method. paired comparison and forced distribution. so that each person is compared to all others to be evaluated. First the names of the persons to be evaluated are placed on separate sheets (or cards) in predetermined order. Three techniques that have been used to evaluate an employee in comparison with other employees are ranking. It is very easy to rank the best and the worst employees. Multiple –Person Evaluation Techniques: In individual evaluation methods is used to evaluation of employees one at a time. it is very difficult to rank the average employees. Paired Comparison: This approach makes the ranking method easier and more reliable.

Human Resource Accounting:- . and Field Review. Other methods:- Other methods include: Group Appraisal method. and this develops an index of the number of preferences compared to the number being evaluated. Paired Comparison: This approach makes the ranking method easier and more reliable. Human Resource Accounting. The number of times a person is preferred is tallied. other supervisors who have close contact with employee’s work. as performers are evaluated on multiple methods. The evaluator then checks the person he feels is the better of the two on a criterion for each comparison. and consultants. for each comparison. This method eliminates ‘personal biases to a large extent. Typically the criterion is overall ability to do the present job. This group uses one or multiple techniques of evaluation. The number of times a person is preferred is tallied. But it is very time consuming process. Typically the criterion is overall ability to do the present job. This group consists of the immediate superior of the employee. Assessment Centre. Group Appraisal method:- In this method. an employee is appraised by a group of appraisers. manager or head of the dept. so that each person is compared to all others to be evaluated. First the names of the persons to be evaluated are placed on separate sheets (or cards) in predetermined order. and this develops an index of the number of preferences compared to the number being evaluated.

In this method. Crompton Greaves. It hardly existed at all at the time of the 1991 survey but 11% of the organizations covered by the 1997 survey had some form of 360- degree feedback. It is a process of accounting for people as an organizational resource. Corporations like GE Reliance. Infosys. and the impression we gained was that many other organizations are contemplating using it. etc. This is a sophisticated way to measure effectiveness. A 360. employee performance is evaluated in terms of cost and contributions of employees. including one’s subordinates peers. the most exciting development in the field of performance management. and skills acquired by employee over a period of time through experience. The value of employees is increased by investments made by the company to improve the quality of its human resources such as training. 360-DEGREE FEEDBACK system 360-degree feedback is the latest feedback. system collects performance information from multiple parties. The HRA process shows the investment the organization makes in its people and how value of these people changes over time. and NTPCetc. Wipro. are all using this tool to discover home truths about their managers. Employee performance can be taken as positive whencontributionis more than the cost and performance can be viewed as negative if cost is more than contribution. for some people. USES OF 360-DEGREE FEEDBACK The uses of 360 degree are numerous: . development. supervisor and customers.

resourcing and succession- planning. d) Strength’s and weakness’s which are pointed out are regarded as developmental opportunities.a) This medium of feedback is there to solely support learning and development as a whole b) To support a number of HR resources such as appraisal. . pay decisions c) A long term perspective is adopted because the ultimate goal is personal growth.

OTHER ASPECTS OF PERFORMANCE MANAGEMENT: JOB EVALUATION JOB ANALYSIS Job Evaluation is different from performance appraisal. JOB EVALUATION: • The process of determining how much a job should be paid. determines how much a job is worth to the organization and therefore what range of pay should be assigned to the job. . Job Evaluation on the other hand. Performance appraisal refers to how well someone is doing an assigned job. based on what the job entails – External Competitiveness: Paying satisfactory performers what the market is paying BENEFITS: It tries to link pay with the requirements of the job It offers systematic procedure for determining the relative worth of jobs An unbiased job evaluation tends to eliminate salary inequities by placing jobs having similar requirements in the same salary range. balancing two goals – Internal Equity: Paying different jobs differently. Job evaluation when conducted properly and with care helps in the evaluation of the performance of the existing employees as well as new jobs.

. power. construction. Expancel. and food and beverages. Trigonox. Duco. protective coatings. Perkadox. The Company provides solutions to the industries and sectors. varnishes. and specialty chemicals. including automotive. shipping and leisure craft.  To be internationally renowned organization. AKZONOBLE INDIA LTD COMPANY PROFILE(ABOUT THE COMPANY) Akzo’ Nobel India Limited is an India-based company. including marine coatings. oil and gas. which is engaged in manufacturing of paints. Sanal. and industrial paints. Coatings segment consists of decorative.  To be a company known for nurturing and developing human resources for organizational excellence. metal coatings. enamels and lacquers. water and waste water. VISION:  To be a world class company. Kromasil. consumer electronics. Sikkens. such as Dulux. specialty coatings and vehicle refinishes. Its portfolio includes brands. Bermocoll. much sought after by both customer and suppliers. Butanox. performance coatings. It manufactures and markets a range of coatings covering decorative paints. Others segment consists of chemicals and polymers. Levasil. known for very high customer base. powder coatings. International and Interpol. Bindzil. aviation. The Company operates through two segments: Coatings and Others.

for the existing as well as the new employees on the basis of actual performance levels through the process of measuring actual competencies exhibited by individuals while performing their jobs. compensation. capacities and behavior which an employee exhibit in doing his/her job and which are key factors in achieving results pertinent to the organization’s strategy. positions. It also helps to determine the roles. employees and company served. Performance based HR system in an organization is necessary to train. defines. This is a new concept which when implemented provide benefits to the organizations as well as the individuals or employees working with it. weaknesses in order to help them better understand their roles and responsibilities and then by making an action plan to minimize the gaps found out in their performance. Introduction of the Project:  Competency represents the knowledge. . The project titled “PerformanceManagement in Akzonoble India LMTis the process of identification of the performance (Acquired and required) required to perform successfully a given job or role or a set of tasks at a given point of time. BENEFITS OF THE PROJECT: Today individual employees as well as the organization have an ongoing need to use and map their competencies. retain talent and ensure optimum utilization of performance from employees. skills. MISSION:  To maximize value to shareholders and provide value enhancement to customers. It identifies an individual’s strengths. appraisals etc.

It will also help them to improve their performance by improving their soft (Behavioral skills like observation. PREFORMANCE MANAGEMENT SYSTEM: Performance management system (PMS) is the heart of any “people management " process in organization. DEFINITIONS: COMPETENCY MANAGEMENT: Today the organizations must ensure that personnel performing various duties have appropriate education. World class organizations use competencies to articulate & leverage exceptional organizational performance. The project will provide motivation to the individual employees to work hard and become better and better by learning the missing skills required. It will also help them to demonstrate their self-confidence that comes from knowing one’s competitive advantage. Performance management refers to the entire . managing the balance sheet. Competency-based management system adds value and enables the realization of business strategy and provides a distinctive. training & experience to perform those duties. Ensuring them to have proper skills & competencies to consistently perform the task required of them is sometimes a daunting challenge. etc. Organizations exist to perform. It reflects how well an employee is fulfilling the job requirements. enduring advantage for the organization. etc.Benefits of this project to individual employees are: Once the individual knows his/her competencies and compare those to that are asked for the job. they themselves can take initiative to develop or train them to fit for the job they are assigned. self-development. communication.) skills and hard skills (Technical skills like writing computer programs.). If people do not perform organizations don't survive.

giving feedback to the employees and offering rewards or reprimand to them.process of appraising performances.Succession planning is usually for 2 to 5 years or 2 to 7 years period for an individual. employees are paid on the basis of number of jobs they are capable of doing. . what emerges is “The Skill Based Pay”. giving feedback to the employees and offering rewards or reprimand to them. REWARD MANAGEMENT: People join organizations expecting rewards. The purpose is to motivate employees to acquire additional skills so that they become more useful to the organization. or on the depth of their knowledge. When rewards are linked to competencies. PERFORMANCE MANAGEMENT: Performance management refers to the entire process of appraising performances. In the skill-based pay. It focuses on identifying & helping to develop the key competencies which enable the employees to perform the current as well as the future jobs & functions. TRAINING & DEVELOPMENT: Training is an integral part of HRD. Succession planning focuses on the identification of vacancies and locating probable successor . In short. but it is a continuous process for an organization. Training can take place either On-The-Job Training such as job rotation or Off-The-Job Training such as outside & in- class room training programmes. SUCCESSION PLANNING: Succession planning an important process which involves identification of individuals or employees as the possible successors to the key or very senior positions in an organization when such position become vacant. Competency management helps in deciding whether to reward a person or not depending upon his/her skills/knowledge and the way they are using it in their assigned jobs or roles.

identify soft skills & competencies for the position and then provide training & development in the necessary competencies so as to achieve superior performance in any job and also can better meet the competitive challenges of today’s market. This typically includes the employee's manager. But the . DIRECT OBSERVATION:In this employees are directly observed performing job tasks and their behavior are coded for competencies. 360 DEGREES FEEDBACK:360 Degree Feedback is a system or process in which employees receive confidential. peers. COMPETENCY BASED PERFORMANCE MANAGEMENT SYSTEM: A competency based PMS helps to identify core positions within the organization. and direct reports.COMPETENCY BASED PERFORMANCE MANAGEMENT SYSTEM: A competency based PMS helps to identify core positions within the organization. identify soft skills & competencies for the position and then provide training & development in the necessary competencies so as to achieve superior performance in any job and also can better meet the competitive challenges of today’s market. anonymous feedback from the people who work around them. But data are limited to items and concepts included in the survey & therefore miss competencies not included by those who conducted the surveys. But again it will take a lot of time to have a chance of seeing something important. Large number of jobs can be studied efficiently & at different times to identify trends in competency requirement. REQUIRED COMPETENCY: Required competency may be defined as “The competencies an employee must have in order to perform his/her job effectively”. SURVEYS: This method facilitates quick and cheap collection of sufficient data for statistical analysis.

communication. Organization with motivated and talented employees offering outstanding service to customers are likely to pull ahead of the competition.real or imaginary- involving human interaction is presented and then spontaneously acted out. It is time consuming and needs experts for analysis. often react differently in real-life situations than they do in acting out a simulated exercise. performance management systems are the key tools to transform people’s talent and motivation into a strategic business advantage. even if the products offered are similar to those offered by the competitors. . ROLE PLAY EXERCISE: This is a technique in which some problem. It reflects various competencies like team player. analytical thinking. And hence the result will not be accurate. Immediate feedback helps them correct mistakes. not a way to determine whether an employee is meeting basic job requirements. Role play develops interpersonal skills among participants. etc. CONCLUSION What makes some businesses more successful than others? What is today’s key competitive advantage? The answer is people.reason we did not use 360 feedbacks is that it is not a way to measure employee performance objectives. But it is not easy to duplicate the pressures and realities of actual decision making on the job.360 feedback is not focused on basic technical or job-specific skills. Customers want to get the right answer at the right time and they want to receive their products or services promptly and accurately. And. Only people can produce a sustainable competitive advantage. and individuals. GROUP DISCUSSION: In this candidates are asked to discuss among themselves hypothetical problems and arrive at a recommended solution. Only people can make these things happen.

. few organizations use their existing performance management system in productive ways. Performance management is usually vilified as an “HR Department requirement”.measuring and developing the performance of individuals and team and aligning performance with the strategic goals of the organization. if they have a performance management. Unfortunately. and to all industries. for profit and not for profit. It also includes a description of employee developmental plans’& the advantages of using 360-degree appraisal system.Performance management is continuous process of identifying .Rao.  Performance management & Appraisal Systems by T. In this case analysis we tried to discuss the advantage of implementing a successful performance appraisal system as well as the negative outcomes associated with deficient system. domestic and global. however. References:  Book of Human resource management by V S P Rao.V.  Performance management by Michael Armstrong & Angela Baron. Performance management is critical to small and large organization.