INTRODUCTION Human Resource Management
The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have -- and are aware of -personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have. Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, e.g., career development, training, organization development, etc. There is a long-standing argument about where HR-related functions should be organized into large organizations, eg, "should HR be in the Organization Development department or the other way around?"
The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner. Recently, the phrase "talent management" is being used to refer the activities to attract, develop and retain employees. Some people and organizations use the phrase to refer especially to talented and/or highpotential employees. The phrase often is used interchangeably with the field of Human Resource Management -- although as the field of talent management matures, it's very likely there will be an increasing number of people who will strongly disagree about the interchange of these fields. For now, this Library uses the phrases interchangeably.
Simply put, it is the observation and evaluation of a school employee’s work behavior and accomplishments for the purpose of making decisions about the staff member. These decisions may include wage, salary, and benefit determinations; promotion, demotion, transfer, or termination actions; and coaching and counseling, training, or career development options.
There are three basic functions of an effective performance appraisal: 1. To provide adequate feedback to staff members on their performance 2. To serve as an opportunity to communicate face-to-face modifications or changes to existing performance objectives 3. To provide data to administrators so they can evaluate a staff member and judge future job assignments and compensation The notion of performance appraisal has become an almost universally accepted fact of life in most organizations. It often serves as the basis for other human resource systems, such as salary management, career development, and selection processes. Because of all of these uses for the performance appraisal process, it is increasingly important that school leaders more than ever need to improve their managerial and supervisory skills in such areas as creating individual performance standards, getting employee commitment to performance standards, and conducting interim and end-of-year performance appraisal meetings. Finally, the report is rounded up by presenting a case study The report is made useful for readers by incorporating Suggestions and Recommendations for all concerned on how to make a grand success of appraisal system followed by their organizations. Few blank formats of different appraisal methods and processes have been included as in the report to show how today’s successful organizations are trying to assess and evaluate their employee performance.
NEED OF THE STUDY
• This project has been undertaken to share my experiences on Performance appraisal system as well as to enhance my understanding of this fascinating subject by doing some study & research in Coca-Cola company.
The project explains the meaning of
different methods used to evaluate the performance of employees located in Coca-Cola company, its effective implementation and the benefits of the system.
It also aims at understanding the problems associated with performance appraisal and suggests measures to be adopted to overcome these issues at the company.
Overall objective of the project is to understand the effectiveness of performance appraisal system on Coca-Cola beverages ltd.
SCOPE OF THE PROJECT
This project report covers the definition and meaning of Performance Appraisal. It elucidates the benefits and drawbacks of the traditional methods as well as recent advances in the field of performance appraisal.
The project throws light on the concern areas for different people involved in the appraisal process and attempts to find out ways to overcome those problems.
Few formats of the
performance appraisal forms have been
included in the project to show the way different companies are evaluating the performance of their employees.
Thus, through this project report one can:
have a reasonable understanding of the term appraisal; understand what needs to be done for its effective implementation; know the key areas of performance indicators; understand the benefits of the system; know how it helps in designing the Performance Rated Pay system; know how it helps in planning of career of employees; performance
The study of the topic “ Performance Appraisal” has been done through various sources.
The Primary source includes the personal experience, which has been added in this project as the `Sample of Current Practice-Case Study’ The Secondary sources include:
• • • •
Information gathered through surfing the internet; Information available on intranet site on knowledge management; Different study materials; Private circulations from consultants; Deliberations with practicing consultants and experts in the field; Sample resources. performance appraisal forms obtained from reliable
The present study is conducted through personal interview with questionnaire. This survey is conducted within limited time period 7days. In the personal interviews can include personal bias between the respondent and me. This survey is conducted for only limited members that is 30. The project duration is too limited to 2 months only.
A BRIEF INSIGHT – THE BEVERAGE INDUSTRIES IN INDIA
In India, beverages form an important part of the lives of people. It is an industry, in which the players constantly innovate, in order to come up with better products to gain more consumers and satisfy the existing consumers.
(FIGURE 1: BEVERAGE INDUSTRY IN INDIA)
The beverage industry is vast and there various ways of segmenting it, so as to cater the right product to the right person. The different ways of segmenting it are as follows: • Alcoholic, non-alcoholic and sports beverages • Natural and Synthetic beverages • In-home consumption and out of home on premises consumption. • Age wise segmentation i.e. beverages for kids, for adults and for senior citizens • Segmentation based on the amount of consumption i.e. high levels of consumption and low levels of consumption.
If the behavioral patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages in two different ways i.e. beverages are a luxury and that beverages have to be consumed occasionally. These two perceptions are the biggest challenges faced by the beverage industry. In order to leverage the beverage industry, it is important to address this issue so as to encourage regular consumption as well as and to make the industry more affordable. Four strong strategic elements to increase consumption of the products of the beverage industry in India are: • The quality and the consistency of beverages needs to be enhanced so that consumers are satisfied and they enjoy consuming beverages. • The credibility and trust needs to be built so that there is a very strong and safe feeling that the consumers have while consuming the beverages. • Consumer education is a must to bring out benefits of beverage consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category. • Communication should be relevant and trendy so that consumers are able to find an appeal to go out, purchase and consume. The beverage market has still to achieve greater penetration and also a wider spread of distribution. It is important to look at the entire beverage market, as a big opportunity, for brand and sales growth in turn to add up to the overall growth of the food and beverage industry in the economy.
COCA - COLA INTERNATIONAL History:
Coca-Cola Enterprises, established in 1986, is a young company by the standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that is the foundation for this Company.
The Coca-Cola Company traces it’s beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca-Cola Company.
The Coca-Cola bottling system continued to operate as independent, local businesses until the early 1980s when bottling franchises began to consolidate. In 1986, The Coca-Cola Company merged some of its company-owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at a splitadjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986.
Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion.
Type Founded Area served Key people Industry
Public (NYSE: KO) 1892 by Asa Griggs Candler Worldwide E. Neville Isdell (Chairman) Muhtar Kent (Chairman-elect, CEO) Beverage Coca-Cola Carbonated soft drinks Water Other Non-alcoholic beverages USD 141.463 Billion (2008) ▲ USD 28.857 Billion (2007)  ▲ USD 7.252 Billion (2007)  ▲ USD 5.981 Billion (2007)  ▲ USD 43,103 MILLIONS (2009 APRIL ) ▲ USD 21,108 MILLIONS (2009 APRIL) 90,500 (2008) www.TheCoca-ColaCompany.com
Headquarters Atlanta, Georgia, United States
Market cap Revenue Operating income Net income Total assets Total equity Employees Website
MANIFESTO FOR GROWTH VALUES :
Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being:
LEADERSHIP: The courage to shape a better future
• • • • • •
PASSION: Committed in heart and mind INTEGRITY: Be real ACCOUNTABILITY: If it is to be, it’s up to me COLLABORATION: Leverage collective genius INNOVATION: Seek, imagine, create, delight QUALITY: What we do, we do well
VISION FOR SUSTAINABLE GROWTH
PROFIT: Maximizing return to shareowners while being mindful of our overall responsibilities. PEOPLE: Being a great place to work where people are inspired to be the best they can be. PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples’ Desires and needs. PARTNERS: Nurturing a winning network of partners and building mutual loyalty. PLANET: Being a responsible global citizen that makes a difference.
(FIGURE 2: VISION FOR SUSTAINABLE GROWTH)
To create consumer products, services and communications, customer service and bottling system strategies, processes and tools in order to create competitive advantage and deliver superior value to; • Consumers as a superior beverage experience • Consumers as an opportunity to grow profits through the use of finished drinks • Bottlers as an opportunity to grow profits in volumes • Bottlers as a trademark enhancement and positive economic value added
• Suppliers as an opportunity to make reasonable profits when creating real value-added in an environment of system-wide team work, flexible business system and continuous improvement • Indian society in the form of a contribution to economic and social development. • To Refresh the World... In body, mind, and spirit • To Inspire Moments of Optimism... Through our brands and our actions • To Create Value and Make a Difference... Everywhere we engage.
“To ensure customer delight, we commit to quality in our thoughts, deeds and actions by continually improving our processes…Every time.”
Coca-Cola main objectives are to supply everyone their favourite drink and to satisfy the consumer needs and wants. Coca-Cola second main objectives are to provide profit to the shareholders and increase the market share.
YEAR WISE HISTORY OF BOTTLING
Year 1894: A modest start for a bold idea: In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales. Year 1899: The first bottling agreement: Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States for a sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their ventur Years 1900-1909: Rapid growth: The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high
Year 1916: Birth of the Contour Bottle: Bottlers worried that Coca-Cola's straight-sided bottle was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic approval. The Contour Bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it is one of the most recognized icons in the world. In the 1920s: Bottling overtakes fountain sales: As the 1920s dawned; more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Sixbottle cartons were a huge hit starting in 1923. A few years later, opentop metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales In the 1920s and 1930s: International expansion: Led by Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries.
In the 1940s: Post-war growth: During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business. In the 1950s: Packaging innovations: For the first time, consumers had choices of Coca-Cola package size and type-the traditional 6.5 ounce Contour Bottle, or larger servings including 10, 12 and 26 ounce versions. Cans were also introduced, becoming generally available in 1960. In the 1960s: Introduction of new brands: Sprite, Fanta, Fresca and TAB joined brand Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by PowerAde and Fruitopia in the 1990s. Today scores of other brands are offered to meet consumer preferences in local markets around the world. In the 1970s and 1980s: Consolidation to serve customers: Advancement in technology led to global economy, retail customers of The Coca-Cola Company merged and evolved into international mega chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and
invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers. In the 1990s: New and growing markets: Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. As the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century: Coca-Cola today: The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as consumers seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows. The per capita consumption of company beverage products (not just Coca-Cola) in 2009: Mexico comes in number one with a staggering 665 (8 fluid ounces) servings, followed by Malta with 598, Chile 426, U.S.399 and Australia 332. Interestingly, the number one sparkling (carbonated) soft drink in China is Sprite; and in India is Thums Up (acquired by Coca-Cola in 1993), followed by Sprite. Even in Japan, Coca-Cola’s Georgia Coffee is the number one soft drink. As consumer tastes vary from country to
country, it is nearly impossible to have the same beverage top the rankings in every market, but having the right portfolio strategy can still put the company in the leadership position. Globally, Coca-Cola has achieved No. 1 global ranking for Sparkling Beverages, Juices and Juice Drinks, Ready-to-Drink Coffees and Teas. The company is No.2 in Sports Drinks, No.3 in Packaged Water, and Energy Drinks. Coca-Cola is working hard to achieve No. 1 in all these NARTD (Non-Alcoholic Ready-To-Drink) beverage categories. Another interesting tidbit is that Nestea is not mentioned at all in the 2009 Annual Review. In the 2008 Annual Review, Nestea is listed as one of Coca-Cola’s 13 billion dollar brands. Nestea trademark belongs to Nestle and the beverage is being marketed and distributed throughout the Coca-Cola system, and Beverage Partners Worldwide, a joint-venture between Coca-Cola and Nestle. In the 2009 report, Simply was the latest Coca-Cola brand to break the one-billion dollar revenue in a year and was added to the list of Billion Dollar Brands. Looking at The Coca-Cola Company website, the corporate press release dated February 11, 2010, was the first time that Simply brand was added to the list of billion dollar brands and the total became 14. The press release dated March 26, 2010, still listed 14 billion dollar brands, but the press release dated March 29, 2010, the list became 13 billion dollar brands.
So why did Coca-Cola exclude Nestea from its billion dollar brands list? Coca-Cola Nestle partnership started two decades ago in 1991 with Coca-Cola Nestle Refreshments to market read-to-drink coffee and tea. Then in 2001, the partnership was renewed as Beverage Partner Worldwide, but in late 2006, the scope of products was reduced to just ready-to-drink tea. For coffee, Coca-Cola turned from the Swiss to the Italians by signing a global partnership with illycaffè SpA to develop and market ready-to-drink coffee under the illy issimo brand in late 2007 with final agreement inked in March 2008. In February 2008, Coca-Cola took a 40% stake in Honest Tea with the rights to acquire the company after 3 years. Personally, CEO of coca-cola enjoy Honest Tea more than Nestea. Although CEO also like Gold Peak which was developed and marketed by Beverage Partners Worldwide, it is very hard to find Gold Peak in stores. Coca-Cola is expected to acquire 100% of Honest Tea in 2011 and perhaps expand this popular brand. Another brand that CEO have seen brewing in the Coca-Cola tea portfolio is Fuze. Already CEO have seen Fuze brand freshly brewed tea dispensers in Subway restaurants. Fuze is also a recent acquisition by The Coca-Cola Company from 3 years ago.
CEO don't know why Nestea got dropped from the list, but I am not going to miss Nestea if it disappears from the shelves or vending machines in the U.S. as it has in Japan a few years ago.
SWOT Analysis of Coca-Cola:
SWOT stands for Strengths Weakness Opportunities Threats. SWOT analysis is a technique much used in many general management as well as marketing scenarios. SWOT consists of examining the current activities of the organization- its Strengths and Weakness- and then using this and external research data to set out the Opportunities and Threats that exist.
Coca-Cola has been a complex part of world culture for a very long time. The product's image is loaded with over-romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts, hats, and collectible memorabilia. This extremely recognizable branding is one of Coca-Cola's greatest strengths. "Enjoyed more than 685 million times a day around the world Coca-Cola stands as a simple, yet powerful symbol of quality and enjoyment” (Allen, 1995). Additionally, Coca-Cola's bottling system is one of their greatest strengths. It allows them to conduct business on a global scale while at the same time maintain a local approach. The bottling companies are locally owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke
does not have outright ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers.
Weaknesses for any business need to be both minimised and monitored in order to effectively achieve productivity and efficiency in their business’s activities, Coke is no exception. Although domestic business as well as many international markets are thriving (volumes in Latin America were up 12%), Coca-Cola has recently reported some "declines in unit case volumes in Indonesia and Thailand due to reduced consumer purchasing power." According to an article in Fortune magazine, "In Japan, unit case sales fell 3% in the second quarter [of 1998]...scary because while Japan generates around 5% of worldwide volume, it contributes three times as much to profits. Latin America, Southeast Asia, and Japan account for about 35% of Coke's volume and none of these markets are performing to expectation. Coca-Cola on the other side has effects on the teeth which is an issue for health care. It also has got sugar by which continuous drinking of Coca-Cola may cause health problems. Being addicted to Coca-Cola also is a health problem, because drinking of Coca-Cola daily has an effect on your body after few years.
Brand recognition is the significant factor affecting Coke's competitive position. Coca-Cola's brand name is known well throughout 94% of the world today. The primary concern over the past few years has been to get this name brand to be even better known. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products. Coca-Cola's bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a large geographic, diverse area.
Currently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate. Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing healthconsciousness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares and offset any losses incurred due to fluctuations in the market. Consumer buying power also represents a key threat in the industry. The rivalry between Pepsi and Coke has produce a very slow moving industry in which management must continuously respond to the changing attitudes and demands of their consumers or face losing market share to the competition. Furthermore,
consumers can easily switch to other beverages with little cost or consequence. Product Life Cycle: When referring to each and every product or service ever placed before the consumer i.e. in the long term all the existing products and services are dead. For e.g.:- Replacement of Ford Cortina ( a highly successful car) by Ford Sierra, the replacement of sierra by the Ford Mondeo and the replacement of the old Mondeo by the new Mondeo in 2001. So every product is born, grows, matures and dies. So in the commercial market place products and services are created, launched and withdrawn in a process known as Product Life Cycle. To be able to market its product properly, a business must be aware of the product life cycle of its product. The standard product life cycle tends to have five phases: Development, Introduction, Growth, Maturity and Decline. Coca-Cola is currently in the maturity stage, which is evidenced primarily by the fact that they have a large, loyal group of stable customers. Furthermore, cost management, product differentiation and marketing have become more important as growth slows and market share becomes the key determinant of profitability. In foreign markets the product life cycle is in more of a growth trend Coke's advantage in this area is mainly due to its establishment strong branding and it is now able to use this area of stable profitability to subsidize the domestic cola wars. All objectives should be SMART i.e. Specific, Measurable, Achievable, Realistic, and Timed.
Selecting Target Market
Once the situation analysis is complete, and the marketing objectives determined, attention turns to the target market. The soft drink market is very large, and the business cannot be “all things to all people”, so it must choose which market segments have the greatest potential. The target market is the group of customers on whom the business focuses attention. The target market is where Coca Cola focuses its marketing efforts as it feels this is where it will be most productive and successful. The target market for Coca cola is very wide as it satisfy’s the needs for many different consumers, ranging from the healthy diet consciousness through Diet Coke to the average human through its best selling drink regular Coke. Most Coke products satisfy all age groups as it is proven that most people of different age groups consume the Coca Cola product. This market is relatively large and is open to both genders, thereby allowing greater product diversification. There are four broad ways which Coca Cola can segment its market: → Mass marketing → Concentrated marketing → Differentiated marketing
→ Niche marketing
The most apparent method used by Coca Cola is with no doubt the differentiated marketing method as Coke satisfy’s a range of different markets. Diet coke satisfy’s the weight consciousness, regular coke, sprite, fanta the average human, coffee, iced tea etc. Each group of beverages satisfy a particular group of people.
2020 vision: We have also begun rolling out our 2020 Vision, the roadmap for winning together with our worldwide bottling partners. Our 2020 Vision roadmap is bringing new clarity and focus to our global business and is ensuring that our system is ideally positioned to make the most of the abundant opportunities ahead of us. We believe our unique global franchise model is the best way to win in the market, while providing sustainable profitable growth for our customers and shareowners. Our priorities remain centered on superior execution to drive value for today while strategically investing in growth for tomorrow. Over the next decade, we expect to see a global economy inevitably strengthened by attractive demographic shifts, rapid urbanization, renewed entrepreneurial energy and improved consumer sentiment. These trends bode well for the future of The Coca-Cola Company and our system.”
The Global Economic Recession Threatens Overall
In 2008 and 2009, the global economy has fallen into a recession. Not just the United States but countries from all over the world have felt the impacts of the 2008 Financial Crisis. This may be a problem for Coke, which derives approximately 75% of its sales from outside North America. Still, the company has positioned itself well in international markets both organically and through acquisitions, such as that of Chinese juice maker Huiyuan for $2.4 billion. However the company was unsuccessful with its purchase of Huiyuan as it broke anti trust laws in China. On March 5, 2010, Coke's CEO said that emerging markets are bouncing back quicker than more developed markets.
“ PERFORMANCE APPRAISAL”
1. The concept of Performance Appraisal dates back to the First World War and was then called “Merit Rating Programme”. Over a period of time, this concept has been through an ocean of change. The areas of evaluation have also changed. 2. Once an employee has been selected, trained and embarked on his duties, it is time for performance appraisal. What is performance appraisal? Why do companies need to take up this task?
According to Carl Heyel, author/editor on management, philosopher and teacher, “it is the process of evaluating the performance and qualifications of the employees in terms of job requirements, for administrative purposes such as placement, selection and promotion, to provide financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally”.
An integral part of performance management system:
Effective performance management requires a good deal of face-to-face supervisor-employee interaction. By knowing the subordinates, a supervisor can steer them onto a path of greater productivity and optimized output. Long-term successful
business owners view performance appraisal as a process of getting to know the people who work for them. It is the most significant and indispensable tool for an organization. It provides information, which helps in taking important decisions for the development of an individual and the organization. 2. Thus, one phase of the annual performance management cycle is performance appraisal, the process of reviewing employee performance vis-à-vis the set expectations in a realistic manner, documenting the review, and delivering the review verbally in a face-to-face meeting, to raise performance standards year over year through honest and constructive feedback. In the process management expects to reinforce the employee’s strengths, identify improvement areas so that one can work on them and also set stretched goals for the coming year. 3. It is composed of the following two processes both of which are qualitative subject to human bias – a. observation and b. judgment
The parameters of performance are a combination of technical expertise and behavioral attributes. The latter scores a high degree of relevance with regard to potential appraisal.
Concept Of Performance Appraisal:
The concept of Performance Appraisal can be explained with the analogy illustrated below:
→ The head of the key represents the uniqueness of the employee. No two employees are alike. → The ring represents the management’s requirement -the job content. → The shaft represents the communication between the employee and the company, the transmission of the task and the response from the performer.
1. A few decades ago, the employee used to be appraised by his department head. The department head used to communicate his feedback and comments only to the immediate superior of the employee. Thus the feedback was kept confidential in nature. As time passed by, the immediate superior started appraising his subordinate’s performance and sending his confidential report to the department head. These were the periods when the employee was not included in his appraisal process. The decisions used to
be taken by his superiors relating to his pay hike, promotion etc. Thus the system was non-transparent. 2. The current process of performance appraisal is much more open and gives some scope for self-appraisal by the employee. The self-appraisal is followed by a joint discussion with superior and then a decision is taken by the department head on his promotion, pay hike etc. The feedback relating to his performance is directly given to the employee. Thus performance appraisal process has gone through the phase of non-transparency to transparency. 3. In this transparency phase, a performance appraisal can be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or bi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. 4. Whether an organization accepts or not the usefulness of Performance Appraisal, whether it adopts a formal appraisal system or not, top management is constantly appraising the performance of its subordinate managers in day-to-day interaction. subordinates. managing. The latter are doing the same to their own They are doing so because Performance
Appraisal, formal or informal, lies at the heart of art of
5. Managing is a dynamic process, concerned almost entirely with the present and the future, whereas Performance Appraisal, as generally used has been a static rating of an employee related almost entirely with the past. Recently, as some managements were recognizing that “rating” by itself had very limited utility, they began to appreciate that managing had evolved into an art. They saw that “management by hunch” could not longer be tolerated, and that measurements-no matter how vague – were essential for the future development of the art of managing. 6. The need for measurements gave birth to several “systems” of managing which attempted to apply measurements of various sorts to the different aspects and elements of the manager’s job. A number of these systems leaned on the better Performance Appraisal methods for their measuring devices or at least for a starting point for measurement. In some instances, these systems expanded or broadened the meaning of Performance Appraisal from a mere rating to include the whole concept of management with all its elements.
Foundations of Performance Appraisal:
Performance Appraisal assesses how well people have been doing their jobs and what they must do to be better in their jobs. It deals with the content of the job and what they are expected to achieve in each aspect of their work. Appraisal process: Following are the foundations in Performance
Job description concentrates more on the definition of tasks the jobholder has to accomplish. It includes details of reporting relationship and normally covers the overall purpose of the job. It indicates how an individual’s job will contribute to the achievement of objectives of a team or a department and, ultimately the mission of the organization.
An objective describes something, which has to be accomplished. Objectives define what organizations, functions, departments, teams and individuals are expected to achieve. There are two types of objectives: i. Work or Operational Objectives: It refers to the results to be achieved or the contribution to be made to the accomplishment of team, departmental and corporate objectives. ii. Developmental objectives: It is concerned with what individual should do and learn to improve their performance and/or their knowledge, skills and competencies (training and personal development plans).
Competencies refer to the behavioral dimensions of a role. It is the behavior required of people to carry out their work satisfactorily. Competencies are what people bring to a job in the form of
different types and levels of behavior. They govern the process aspects of job performance.
Increasingly, organizations are setting out the core values that they think should govern the behavior of all their employees. Value statements may be prepared which define core values in areas such as care for customers, concern for people, competitiveness, excellence, growth, innovation.
Three Essential Steps For Effective Performance Appraisal:
The process of getting to know the people who work for the organization involves three essential steps viz. training, evaluation and review.
Successful training is the implementation of a system in which everyone in the workplace is geared towards improvement. It involves a hands on approach in which the employee is encouraged to evaluate himself or herself under the guidance of the appraiser. How it works? First, the appraiser includes the employee in the appraisal process.
When an employee knows that his or her opinion of other workers is taken into account, he or she also realizes that everyone else’s opinion matters just as much. This not only empowers the employee and improves relations in the workplace, but it encourages higher productivity as well. This interactive approach is made complete with the leadership of the appraiser. Carefully administering praise coupled with constructive criticism keeps the workforce on its toes.
The best methods for employee evaluation are based on results
and behavior. While conducting performance appraisal based on employees’ characteristic traits is quite common, the results are often subjective and unsatisfactory. A results-based approach to performance appraisal is by far the cleanest, most objective method of tackling the complex task of evaluation. It uses a rating system to measure productivity within a given timescale. If an employee makes a certain number of sales in a certain week, he or she can be rated by sheer worth as well as ranked against other employees. The study of behavior is closely tied to productivity. The pace of work, willingness to put in overtime and ability to work with others all contribute to overall productivity.
The review process should, again, employ the techniques of interactivity. Before sitting down together, the appraiser should give the employee a chance to review himself or herself. This not only empowers the employee, but also saves a lot of time and possible contention during the actual discussion. Initially the appraiser should walk the employee through the process. The successful supervisor starts out with an overview of why the review session is needed. Then the supervisor takes the employee down a point-by-point list of every aspect of the job. In each case, the employee should be given a chance to describe his or her achievements and shortcomings. The supervisor should always supplement this with added insight. While praising and applying criticism, the supervisor maintains authority throughout the review and indeed, the entire appraisal process.
Objectives and Benefits:
The objectives and benefits of Performance Appraisal system can be summarized as under:
Data relating to Performance Appraisal of employees are recorded, stored and used for several purposes like: • Let the employees know where they stand in so far as their
performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. • • • • • • • • Assessment of skills within an organization. Set targets for future performance. Effect promotions based on competence and performance. Strengthen relationship between superior and subordinate. Assess the training and development needs of employees. Identify the strengths and weaknesses of employees. Decide upon a pay raise (increments). Improve communication as it not only provides a system for
dialogue between the superior and the subordinate, but also improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the appraiser and appraisee. • Determine whether human resource programs such, as selection, training and transfers have been effective or not.
The following are the benefits of a successful appraisal system: 1. For the Organization:
♦ Improved performance throughout the organization due to: − − − Effective communication of organization’s objectives and values. Increased sense of cohesiveness and loyalty. Managers are better equipped to use their leadership skills and to develop their staff. ♦ Improved overview of tasks performed by each member of a group. ♦ Identification of ideas for improvement. ♦ Creation and maintenance of a culture of continuous improvement. 2. For the appraiser: ♦ Opportunity to develop an overview of individual jobs. ♦ Opportunity to identify strengths and weaknesses of appraisees. ♦ Increased job satisfaction. ♦ Opportunity to link team and individual objectives with department & organizational objectives. ♦ Opportunity to clarify expectations that the manager has from teams and individuals. ♦ Opportunity to re-prioritize targets ♦ Means of forming a more productive relationship with staff based on mutual trust and understanding. ♦ Due to all above Increased sense of personal value
3. For the appraisee: ♦ ♦ Increased motivation and job satisfaction. Clear understanding of what is expected and what needs to be done to meet expectations. ♦ Opportunity to discuss aspirations and any guidance, support or training needed to fulfill these aspirations. ♦ ♦ Improved working relationships with the superior. Opportunity to overcome the weaknesses by way of counseling and guidance from the superior ♦ Increased sense of personal value as he too is involved in the appraisal process In line with the objectives of Performance Appraisal, to reap it’s benefits, this system has to be effective failing which it may mar the very purpose of performance appraisal.
Effective Appraisal Process:
When it comes to performance appraisal, managers and employees agree about one thing: They hate going through them. Employees, managers and HR experts agree that fear, guilt, responsibility and resentment are the real reasons why most employees dread the appraisal process. Besides some think that it is a ritual that is mandatory to follow.
An effective review process helps organizations in three areas: 1. evaluation and improving personnel selection and training systems; 2. 3. preventing wrongful termination; and increasing real employee diversity
Good appraisals start with information from multiple sources, and they evaluate employees at all levels from top to bottom.
This system requires both the appraisee and appraiser to jointly assess the employee’s ability to complete the duties and achieve the goals set forth in the previous appraisal.
HR professionals should consider the following steps and make the appraisal process simple yet effective: • The performance Appraisal form should reflect the strategic objectives of the company. Many organizations use a form that contains several sections. • The results and impact section should address accomplishments related to job responsibilities, goals and projects. It is a review of past performance. • A skills and abilities section should discuss the ways those results were accomplished. By listing the core competencies for each job classification – and for the entire organization – this section can address the kinds of behavior that are critical for success.
Appraisal results, either directly or indirectly, determine reward outcomes. The better performing employees may get the majority of available merit pay increases, bonuses and promotions, while the
poorer performers may require some form of counseling or in extreme cases no increases in pay. The assignment and justification of rewards and penalties through performance appraisal is a very uncertain and controversial matter and conveys both satisfaction as well as dissatisfaction with an employee’s job performance. Whatever is the case, organizations should foster a feeling that performance appraisals are positive opportunities that provide for overall development of the employee, in order to get the best out of the people and the process. Hence performance appraisals should be positive experiences and it should never be used to handle matters of discipline.
Designing an Appraisal Process:
Before understanding the process of appraisal, the following terms are revised:
Performance refers to an employee’s accomplishment of assigned tasks. Performance Appraisal is the systematic description of the jobrelevant strengths and weaknesses of an individual or a group. Appraisal period is the length of time during which an employee’s job performance is observed in order to make a formal report of it. Performance Management is the total process of observing an employee’s performance in relation to job requirements over a period of time (i.e. clarifying expectations, setting goals, providing on-thejob coaching, storing and recalling information about performance)
and then making an appraisal of it. Information gained from the process may be fed back via an appraisal interview to determine the relevance of individual and work-group performance to organizational purposes, improve the effectiveness of unit and improve work performance of employees. Designing an appraisal program poses several questions, which need answers. They are: 1. 2. 3. 4. 5. 6. 7. 1. Whose performance is to be assessed? Who are the appraisers? What should be evaluated? When to appraise? What problems are encountered? How to solve the problems? What methods of appraisal are to be used? Whose performance should be assessed? The answer is obvious – employees. When we say employees, it is individual or teams? Specifically, the appraisee may be defined as the individual, work group, division or organization.
Who are the appraisers? Appraisers can be immediate superiors, specialists from the human resource department, subordinates, peers, committees, clients, selfappraisals or a combination thereof.
What should be evaluated? One of the steps in designing an appraisal program is to determine the evaluation criteria. It is obvious that the criteria should be related to the job. The criteria for assessing performance can be:
a. b. c. d. e. f. g. h. i. j. k.
Quality & Quantity Timeliness Cost Effectiveness Need for supervision Interpersonal impact Innovation & Creativity Problem Analysis Customer orientation Market Orientation Entrepreneurial Drive Negotiation skills etc.
This is not an exhaustive list, but several other parameters too can be added depending on job requirements and organizational needs. 4. When to appraise/rate? The most frequent rating schedules are semi-annual and annual. New employees are rated more frequently than older ones. Some practices call for ratings: ∙ ∙ ∙ Annually as per company practice After first 6 months of employment Upon promotion or within 3 months after promotion
∙ ∙ 5.
When the job occupied has been reevaluated upward Upon special request, as when the employee’s salary is below the average pay
What are the problems related to Performance Appraisal? An ideal Performance Appraisal is done when the evaluation is free from biases and idiosyncrasies of the evaluator. There are many factors of appraisal that lead to failure of the system: a. Negative attitude towards Performance Appraisal: There is a large population of managers who are hostile or indifferent to the Performance Appraisal processes and/or do it badly if they do it at all.
i. Hostility from the appraiser:
The appraiser reacts indifferently to the appraising system because he believes that it is a waste of time. At times they feel that the scheme has nothing to do with their own needs and it exists to feed the personnel database.
ii. Hostility from the appraisee:
Hostility from the people at the receiving end arises because they feel Performance Appraisal is simply another method in the hands of the managers to exercise their command and control prerogatives. They feel that the data collected will be utilized as evidence against them. In some cases appraisees even have a feeling that the outcome of the performance evaluation is predetermined by the management or their superiors and the process is completed only as a formality, due to which appraisees lack interest in the entire appraisal process.
Halo Error: Under this type of error, one marked characteristic or latest achievement or failure of the appraisee (either favourable or unfavourable) may be allowed to dominate the appraisal for the entire year.
Logical Error: This is a dangerous pitfall for the inexperienced appraiser. He is very often inclined to arrive at similar assessments in respect of qualities that seem logically related.
Constant Error: When two appraisers rate an appraisee their ratings may be different. One may show consistent leniency by giving him high scores, the other my consistently rate him by giving low scores.
Central Tendency: It is also called as “Average Ratings”. Here, the appraiser tends to avoid giving frank views to the question asked or the appraiser is in doubt or he has inadequate information or he simply wants to play safe and don’t displease anyone.
Mirror-Image Error or Projection Error: This error arises when an appraiser expects his own qualities, skills, and values in an appraisee. The appraiser may falsely believe that if the appraisee is good he has to be like him (appraiser) because the appraiser considers himself as the standard.
Contrast Error: This error occurs in the sequencing of ratings. If superior performers are rated first, average performers are rated down, if poorer performers come first, the average performers will be rated more highly.
Biases of position, Sex, Race, Religion & Nationality: There is a tendency to rate the occupant at a higher position more favorably than the person in a lower position. Similarly rating can be biased based on sex, religion and nationality too.
Lack of Skill in conducting Appraisal discussion: Conducting Performance Appraisal discussions require certain skills and training.
How to solve the appraiser’s problems? The best way to overcome the problem is to give training to the appraiser. Training can help improve the appraisal system to the extent that distortion occurring due to appraiser errors such as halo, leniency, central tendency and bias are minimized.
Factors that help to improve accuracy: • The appraiser has observed and is familiar with behaviors to be appraised. • The appraiser has documented behaviors calling for improvement. • The appraiser has a checklist to obtain the review on jobrelated information.
• The appraiser is aware of personal biases and is willing to take action to minimize their effects. • Rating scores by appraisers of one group or organization are summarized and compared with those by other appraisers. • The appraiser focuses attention on performance related behaviors over which he has better control than on other aspects of evaluation. • Higher levels of management are held accountable for reviewing all ratings. b. Factors that may lower accuracy: • The appraiser rates only when administrative actions are contemplated. • The appraiser is unable to express herself/himself honestly and unambiguously. • Appraisal systems, processes and instruments fail to support the appraiser • The appraiser is unaware of causes of rating errors. • The appraiser has to rate employees on factors that are poorly defined. 7. Techniques/methods of appraisal to be used? There are different types of systems for measuring the excellence of an employee. Each type has its own advantages and disadvantages. The earlier developed methods, still being used, are Traditional Methods that
are non-transparent in nature. While other newer methods are transparent in nature. Each of the method has it’s own format of appraisal form.
Traditional Methods of Appraisal:
Performance Appraisal is an exercise of observation and judgment, a feedback process, and an organizational intervention. It is a measurement process as well as an intensely emotional process. Above all, it is an inexact, human process. While it is fairly easy to prescribe how the process should work, descriptions of how it actually works in practice are rather discouraging. Some of the traditional methods of appraisal are explained below: Ranking In this, the superior ranks his/her subordinates in order of their merit, from best to worst. -
It is done in a competitive group. It is done by placing the appraisee on numerical scales i.e. 1 st, 2nd, 3rd etc. in the total group.
Ranking of an appraisee on his job performance/traits against that of another member.
Person-to-Person/Paired Comparison Under this method the appraiser compares each employee with every other employee, one at a time. Certain key performance areas/traits are developed. E.g.: Leadership, Creativity, Initiative etc. A scale for each factor is designed.
A scale of people is also created for each factor. Each Appraisee is compared to every other person on the scale. Certain scores for each factor are awarded to the appraisee.
Certain categories of traits/performance criteria, which are worth of appraising, are established. E.g. cooperativeness, selfexpression, dependability, job knowledge etc.
The actual performance (Key performance area) of an employee is then compared to the predetermined grade definitions.
Appraisee is allotted with the grade, which describes his performance in the best possible manner.
Any grade that is selected should be well defined.
Graphic Scales A printed form, one for each person to be rated is used. The factors included in the form are Employee characteristics such as leadership, cooperativeness, enthusiasm, loyalty etc. or Employee contribution which includes quantity and quality of work, specific goals achieved, regularity of attendance, responsibility assumed etc. The traits can be evaluated on continuous scale – the appraiser places a mark along a continuum (range). The best method to use is the “multiple” type of scale wherein one has to “tick off” the box, which suits the description of an appraisee’s performance. Certain types of graphs are prepared based on these derived ratings.
Checklist A series of questions are presented concerning an appraisee’s behavior. The appraiser has to reply to the questions in either negative or positive tone- (Yes/No). The value of each question may be weighted i.e. one can have predetermined scale and scoring to those questions. Essay A blank form is given to the appraiser. The form contains main heading such as employees’ characteristics, attitudes, job knowledge, potential etc. The appraiser is asked to put in words his impressions about the employee. It contains factual and concrete knowledge. It gives specific information about the employee.
Confidential Reporting It is the most traditional way of appraising employee’s performance. The basic assumption here is that since the superior is in direct contact he knows his subordinates better than any other and hence his appraisal would be more appropriate. The superior writes a paragraph or so about his subordinate’s strengths, weaknesses, intelligence, attitude to work, attendance, conduct and character, work efficiency, etc.
Critical Incident Method - Initially a set of noteworthy (good or bad) on-the-job behaviours is prepared. This is usually in the form of incidents. - These incidents are given to a group of experts who assign scale values depending upon the degree of desirability for the job. - This checklist is used by superiors for evaluating the employees. - This method helps in identifying the key areas where the employees are weak or strong. - It emphasizes rating on objective evidence and helps in counseling. Forced Choice Technique In forced choice system the appraiser is forced to choose one from among a group of 4 statements that best fits the individual being rated and one which least fits him. Each statement is given a value or a score. The evaluator does not know the score value of statements; hence he cannot show any favor towards the appraisee. The method of arranging the traits involves a long process from getting the description of “good” or “bad” employees to establishing their validity and reliability. Behaviourally Anchored Rating Scales (BARS) Behaviourally Anchored Rating Scales (BARS) are anchored with descriptive alternative behaviors. For every given category of behavior or performance, statements are ordered in an ascending or descending order of excellence.
Although these scales represent job-relevant dimensions of performance, they still pose problems in determining which actually, observed behaviours match with specifically anchored performance scales.
Despite this difficulty, BARS are a significant improvement, since they require less inference on the appraiser’s part as against traditional rating approaches.
The above methods are non-transparent in nature, as the appraisee or the employee is not involved in the process of his appraisal. The rating is done entirely by his superiors.
New Frontiers to Performance Appraisal :
In recent years the system of performance appraisal is becoming more and more transparent wherein the employee, who is being appraised, is involved in the process. The objectives or targets are set with mutual understanding between the appraisee and his immediate superior. The feedback regarding his performance is given to the appraisee with areas of improvement by disclosing his strengths and weakness and the opportunities available. I will take you into details of these new frontiers to Performance Appraisal viz:
I. II. III.
Management by Objectives (MBO) 360º Feedback Balanced Scorecard
MANAGEMENT BY OBJECTIVES
Management by Objectives is basically a process whereby the superior and the subordinate managers of an enterprise jointly
identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members. Management by Objectives is primarily to change the behaviour and attitude towards getting an activity or assignment completed in a manner that it is beneficial for the organization. Management by objectives is a result-oriented process, wherein emphasis is on results and goals rather than a prescribed method. A number of companies have had significant success in broadening individual responsibility and involvement in work planning at the lowest organizational levels. 2. The concept rests on a philosophy of management that emphasizes integration between external control (by managers) and self-control (by subordinates). It can apply to any manager or individual no matter what level or function, and to any organization, regardless of size. For instance, the number of quality articles to be churned out in a week at a publishing house is, let’s say, five. This is the goal of the organization. This goal has to be set in coordination with the writers. The emphasis here again would be on accomplishing this task flawlessly over the week rather than the setting of a method to accomplish the same. You are giving them a free hand to decide as to how they want to work in order to accomplish target. This gives the employee both responsibility as well as authority to do a job. The employees are now responsible for its success or failure and it is their baby. It is a VERY SMART MANAGEMENT TOOL where the employee is involved in the decision making process.
Management by Objectives is a five-sutra process having following basic steps:
i. Set Organizational Goals:
This envisages that organizational goals and business strategies are expressed clearly, concisely and accurately. They are periodically reviewed. They should be challenging enough to motivate the employee. Clear and attainable goals help channel energies towards desired behaviour and let the employee know the basis on which he will be rewarded. At this time, any appropriate changes in the organization structure should be made: changes in titles, duties, relationships, authority, responsibility, span of control and so forth.
ii. Joint Goal Setting:
performance oriented, between the management and the employee. The responsibilities are clarified to the employees through organizational charts and job description. The goals decided by the employee need to complement the goals of the management. They also need to be flexible to accommodate responsibilities. new ideas Moreover without they losing should individual be easily
quantifiable. For example: To prepare, process and transfer to the office
superintended, all account payable vouchers within three working days from the receipt of the voucher. To hold weekly meetings with all employees.
To use program evaluation and review technique (pert) for all new plant layouts.
iii. Performance Reviews:
This step suggests frequent performance reviews between the manager and the employees. During the initial stages the meetings be held once a month and later could be quarterly. For maximum benefit these meetings should be scheduled for more than once a year.
iv. Set check posts:
Establishment of major check posts to measure progress. This is merely to check that the employee surges towards his premeditated (planned) goal without any disruptions. These check levels should be higher in the initial stages and then gradually reduce. This demands that the manager should be on constant alert and exercise sound judgment.
The employees who receive frequent feedback about their performance are highly motivated than those who do not. However, one has to ensure that the feedback is relevant and specific. This helps the employee and the manager understand where they stand. The five-sutra process of management by objectives ensures that the manager and the employee define and establish goals and objectives for an employee to be achieved within a prescribed period of time. The employee is to be supervised and evaluated, periodically. To this extent,
a frequent feedback and superior-employee interaction model must be evolved.
Throughout the time period what is to be accomplished by the entire organization should be compared with what is being accomplished; necessary adjustments should be made and inappropriate goals discarded. At the end of the time period a final mutual review of objectives and performance takes place. If there is discrepancies between the two, efforts are initiated to determine what steps can be taken to overcome these problems. This sets the stage for the determination of objectives for the next period.
Benefits of MBO Program
Helps and increases employee motivation because it relates overall goals to the individual’s goals; and help to increase an employee’s understanding of where the organization is and where it is heading.
Managers are more likely to compete within themselves than with other managers. This kind of evaluation can reduce internal conflicts that often arise when managers compete with each other to obtain scarce resources.
Results in a “means-ends” chain. Management at succeedingly lower levels in the organization establishes targets, which are integrated with those at the next higher level. Thus, it can help ensure that everyone’s activity is ultimately aimed toward organization’s goals.
Reduces role conflict and ambiguity. Role conflict exists when a person is faced with conflicting demands from two or more supervisors; and role ambiguity exists when a person is uncertain as to how he will be
evaluated, or what he has to achieve. Since MBO aims at providing clear targets and their order or priority, it reduces both these situations.
Provides more objective appraisal criteria. the manager’s performance.
The targets that
emerge from the ` process provide a sound set of criteria for evaluating
Forces and aids in planning.
By forcing top management to
establish a strategy and goals for the entire organization, and by requiring other managers to set their targets and plan how to reach them.
Identifies problems better and early. review sessions make this possible.
Identifies performance deficiencies. It enables the management and employees to set individualized self-improvement goals and thus proves effective in training and development of people.
Helps the individual manager to develop personal leadership, especially the skills of listening, planning, counseling, motivating and evaluating. This approach to managing instills a personal commitment to respond positively the organization’s major concerns as well as to the development of human assets. Such a manager has a far greater chance to move ahead within the management hierarchy.
With the movement in the eighties to find new strengths and productivity through employee empowerment came the idea of performance appraisals from subordinates, their superiors, their peers and themselves – “360º feedback.”
1. The 360º Feedback process is called multi-source assessment, taps the collective wisdom of those who work most closely with the employee, superiors, colleagues (peers), direct reports and possibly internal and often external customers. The collective intelligence these people provide on critical competencies or specific behaviours and skills gives the employee a clear understanding of personal strengths and areas ripe for development. Employees also view this performance information from multiple perspectives as fair, accurate, credible, and motivating. Employees are often more strongly motivated to change their work behaviours to attain the esteem of their coworkers than to win the respect of their supervisor alone.
2. As the 360º Feedback process better serves the needs of employees, it serves the changing needs of their organizations too. Organizations are reducing hierarchy by removing layers of management and putting more emphasis on empowerment, teamwork, continuous learning, individual development, and selfresponsibility. The 360º Feedback Model aligns with these organizational goals to create opportunities for personal and career development and for aligning individual performance expectations with corporate values.
Diagram showing the key stakeholders in a 360º Feedback Process
Benefits to Key Stakeholders The 360º Feedback process offers extensive and diverse benefits to key stakeholders in the organization – and the organization too:
The process gives customers a chance to The 360º
strengthen the customer-supplier relationship.
Feedback captures the relevant and motivating information from internal and external customers while giving them a voice in the assessment process.
b. Employees: By participating in a process that has tremendous
impact on their careers, employees may help select what evaluation criteria will be used to judge their performance and who will provide feedback. Participation plays a critical role for employees as they determine the fairness of the process.
Team members: The only option for identifying team and individual members’ effectiveness is 360º Feedback. Failing feedback from multiple sources, team members lack the information necessary for effective individual development and teamwork. With no team evaluation, accountability may evaporate, and performance may falter (weaken).
This process expands supervisors’ insight
regarding the performance of each direct report by providing them more comprehensive and detailed performance information than they usually have access to. time spent on evaluating individual employees.
e. Leaders and Managers: The process provides leaders and
process typically reduces by half, or more, the supervisor’s
managers an opportunity to tap information from the organization that may otherwise not be shared with them for fear of reprisal.
Organizations can gain access to credible, information to understand organizational
strengths and weaknesses, leadership gaps, and training needs more fully. This information is much more useful than relying on intuitive judgment or responding to those who are making the most noise. Why are Organizations adopting these systems? Structure and cultural factors and employee’s relations have motivated organizations to begin experimenting with 360º Feedback systems. For example, as organizations remove layers of management, flatten their structure, and begin using self59
directed teams, the only practical option for performance feedback is from multiple sources. As organizations change their culture to align with their vision and values, 360º Feedback becomes an ideal choice to communicate the new competencies required by the new values. Structure changes Organizational structures have changed substantially since the mid-1980s. The 360º Feedback process offers support for these structural changes, such as growth in supervisor’s span of control, the increased use of technical or knowledge workers, and introduction of matrix and project management organization design, and the move to working in teams.
g. Increased span of control:
A typical manager used to
supervise three to nine employees. Today production and service companies have moved from traditional span of control to one supervisor for as many as seventy or more direct reports. Classic supervisors with a large number of reporting relationships lack the opportunity to observe many individual performance actions.
h. Knowledge workers: A supervisor may not have enough
performance feedback on employees in positions requiring highly specialized knowledge, like MIS managers or scientists. Many organizations have adopted a multi-source system to provide accurate assessments by coworkers with similar expertise.
i. Matrix and Project Management: Many organizations have
adopted 360º Feedback systems because their employees work in matrix or project management situations, with employees often reporting to more than one supervisor during a project. Matrix organization structures occur as a result of the need to deploy human assets at high velocity. People move quickly from project to project and may only occasionally interact directly with their supervisor. Project management designs require information from multiple sources because no one person has sufficient information to provide a complete performance picture of the individual.
When the organizational structure has moved from
classic supervisory designs to work teams, with leadership dispersed throughout the team, team members offer highly credible performance feedback. Change in Organizational Culture Revolutionary changes in organization cultures have made traditional single-source assessments illogical and impractical. Among these changes are:
employees a voice in organizational decision processes and have adopted 360º Feedback systems to drive culture change and align individual behaviours with organizational values and objectives. Leaders who best empower employees are recognized and rewarded when those they lead provide excellent performance feedback.
Empowerment: The 360º Feedback process communicates the appropriate actions needed from employees to support this culture change, and these actions are then recognized and rewarded.
Customer Services: The improved communication through 360º Feedback can translate to better customer service.
Quality Focus: The 360º Feedback systems provide the best measures for competencies. This logical application for individual performance measurement meshes with the organization’s quality philosophy.
Reengineering: Reengineering or the reinvention of work processes often requires new methods to obtain accurate performance measures. Reengineering actions focus on redesigning the way employees work in order to improve individual, team, and organizational productivity. Since 360º Feedback systems improve the quality of information, these systems logically support the reengineering effort at organizations.
Information from multiple
sources offers the best method for measuring competencies. Traditional, single-source measures are deficient at assessing competencies because supervisors seldom have sufficient opportunity to observe each employee’s full range of work behaviours.
Team-Based Rewards: 360º Feedback systems are the most appropriate ways to evaluate individual performance and contribution. Team assessment provides these organizations
with a credible information source for recognition and rewards.
End of Entitlements: Multi-source performance measures more clearly distinguish among levels of performance than do single-source measures. Multi-source assessments are substantially better at distinguishing high, medium, and low performers, enabling appropriate recognition and rewards and an end to automatic entitlements.
Employee Relations No other information has more impact on an employee’s career than information on his or her performance. Hence, the accuracy, fairness and usefulness of performance measures are critical factors to employees.
Career Development: The 360º Feedback process yields specific and quantitative information for each employee to use in making intelligent career decisions.
Fair Reward Decisions: Managers and employees want pay and promotion decisions to be fair. Research across large sets of employee groups indicates that users perceive 360º Feedback to be fairer than single-rate processes.
Accurate Performance Measures: Assessment by multiple coworkers is more reliable and objective than information gained from a single person because they have the best opportunity to observe work behaviours.
Valid Performance Measures: Assessment information when provided by the individual’s work associates; the
employee tends to perceive the results as having for more credibility as against a single-source assessment.
Non-performance: Supervisors must document, justify and confront non-performance. 360º Feedback systems helps in identifying non-performers or poor-performers as coworkers and team members are rarely reluctant to identify them if they are not sufficiently contributing to the team’s efforts and try to push them if they need help.
measures moderate adverse discrimination against older employees, presumably recognizing the great experience level; are generally neutral to women as against singlesource assessment which are often biased.
Legal Protection: Multi-source assessments offer stronger legal protection, resembling the jury system because the model combines multiple perspectives.
Pitfalls of 360º Feedback a. 360º feedback has produced some real successes; but when not done artfully, including internal preparation, it can rebound. Colleagues and subordinates are good judges of behaviour and managerial style but are not best judges of a manager’s job performance. Hence the ratings should be used with caution in decisions for pay and promotions. b. In practical, peers and subordinates tend to give negative feedback about a manager due to bias or for setting scores.
Such feedback may get undue importance when only selected few peers and subordinates appraise a manager. c. Also, at times, the organizational culture is unable to accept the system. Options for implementation There are three common ways of getting 360º degree feedback each more comprehensive and powerful in promoting change, both organizational and personal: i. using an outside consultant, minimizing any personal friction within the organization; ii. launching a comprehensive program in-house to get feedback on all key people, top to bottom; iii. creating a comprehensive program designed to uncover not just personal flaws but systematic and organizational ones, too. The implementation of the same are detailed below: a. Send a few managers to an outside consultancy for assessment and feedback. Here, managers may hand out survey to whom they know (and expect to get feedback with minimal negative information) the data collected by the consultancy, and the managers receive an "offsite" training and feedback session with similar managers from different companies. While this approach has its merits, its major deficiency is that a few individuals are changed, the overwhelming mass
of management is not, and the systems and processes that encourage old behaviors are still in place.
The second approach is to bring such a program "in-house", where many managers receive 360º feedback. In this approach, the feedback can be more systematic for two reasons: i) surveys are handed out to all subordinates and peers rather than those who have been "volunteered" by the person receiving feedback. This tends to reduce "sampling bias" of just giving it to those who might give just good feedback; and ii) the implementation of this process can be from the top of the organization down the bottom. This has the advantage of allowing upper management to be an example of willingly receiving such feedback and encourage them to be both models of behavior and coaches to those underneath them.
The third approach involves all of the second approach, and also deals with "systems issues." Where 360º feedback alone can only deal with problems caused by individual behavior, it by itself does nothing for the systemic causes of problems, such as organizational structure, inappropriate and distorted measurement systems, company-wide lack of skills, or performance appraisal and pay problems. 360º Feedback can serve both as a catalyst to help management realize the systemic causes of organizational problems, and can be part of the solution, so that management style becomes in harmony with other organizational changes senior management is trying to make.
The following issues need to be considered before implementation of 360º feedback Questions about implementing 360º feedback are easy to ask but not so to answer. Often times, management assumes the answers but does not openly discuss them with the result being much chaos and confusion down the road. Among these some of these questions are:
How ready is your organization to handle 360º Feedback? Often times, organizations may be willing to pay consultants to assist them in implementing such a system, but the organization needs to be prepared. At times, "soft skills" training in communication, leadership, management style, meeting management etc. is useful in preparing management. Teambuilding activities might also be useful, as well as a general organizational climate survey to determine the context of implementation and find any additional issues beyond management style that might be a problem.
Who needs to agree? Who will be the decision-making body about 360º feedback? Will it be the head of the organization, or Human Resources, or a cross-section of employees from a variety of levels?
Who will be involved? Which employees are to be the focus of the 360º feedback, and who will provide it to them?
Is this voluntary or mandatory? Will some employees be offered the "opportunity" to receive this feedback, will everyone receive it, or will just management receive the feedback?
What methods and measurements will be used? Will employees just fill out numerical surveys, or will this information be supplemented with observations and interviews? Will the report be just a graph, a summary of high need for change survey items, or will there be a written report with recommendations? To what extent will this report be personalized and handcrafted Vs being automated?
To what extent will the data be collected anonymously and/or confidentially? While the intent may be to keep the survey data anonymous, if written comments or interview data are also included, the data may have to be altered to avoid making obvious conclusions about who communicated what. In addition, management must answer questions about personal, confidential data that might be accidentally revealed during interviews.
To what extent will the data be collected anonymously and/or confidentially? While the intent may be to keep the survey data anonymous, if written comments or interview data are also included, the data may have to be altered to avoid making obvious conclusions about who communicated what. In addition, management must answer questions about personal, confidential data that might be accidentally revealed during interviews.
What will be done with alleged violations of laws, ethics or policies? Though this may not be the intent of 360º feedback, on occasion information is gathered that suggests violations of legal, ethical and company codes of conduct.
What information will be public? At first blush, you might think that all data will be private, but does that mean that one's own supervisor can't see the data and the report? Will group and company averages be made public without them being broken down into individual scores?
What consequences will there be? Will they receive additional coaching and counseling, training, or be terminated or re-assigned? Will the 360º feedback be the sole determiner of this decision?
What logistics and support will be necessary to make this successful? To what extent will the data be collected electronically (via the Web or intranet) or on paper? What administrative and technical support will be necessary?
feedback on management style in and of itself can only be part of organizational change and can rarely stand on its own. As a result, one must ask how and when will 360º degree feedback be incorporated into training, selection and pay decisions?
Balanced Scorecard (BSC) is a set of measures derived from an organization’s vision and strategy. It is a concept that helps translate strategy into action. It requires an organization to balance its goals across multiple perspectives to reduce the chance that one goal will dominate others to the detriment of
It leads to a realistic compromise that
addresses short-term goals and longer-term staying power. The balanced scorecard was developed by Robert S. Kaplan and David P. Norton in early 1990s. The article The Balanced Scorecard - Measures that Drive Performance of Harvard Business Review (year 1992) – describes balanced scorecard as a methodology used for measuring success and setting goals from financial and operational viewpoints. With those measures, leaders can manage their strategic vision and adjust it for change.
BSC links performance measures by looking at a business's strategic vision from four different perspectives: financial, customer, internal business processes, and innovation & learning. These four perspectives of the Scorecard provide a balance between desired outcomes and drivers for those outcomes and between objective and subjective performance measures. BSC is prescriptive about a balanced range of measures and about how one perspective defines the drivers for the next. a. Financial Perspective The financial perspective provides a view of how the senior executives, the board of directors and the shareholders see the company. Typical metrics in this perspective might be earning per share, revenue growth and profit maximization. In the BSC, financial measures play a dual role: they define the financial performance expected from the strategy and they serve as the ultimate targets for the objectives and
measures of all the other scorecard perspectives.
financial measures are chosen based on the business life cycle and also the strategic theme chosen for the financial perspective. In addition to increasing returns, most organizations are concerned with the risk of these returns. Therefore, when it is strategically important, these organizations will want to incorporate explicit risk management objectives into their financial perspective. As a conclusion, eventually all objectives and measures in the other scorecard perspectives should be linked to achieving one or more objectives in the financial perspective. b. Customer Perspective The customer perspective provides a view of how the customers see the company. Kaplan and Norton contend that, " to put the balanced scorecard to work, companies should articulate goals for time, quality, and performance and service and then translate these goals into specific measures." Overall, this is a measure of how the company provides value to the customer. Changes made to a business process output that lowers the customer’s cost or allows the customer to achieve his or her objective, have value for the customer. For example, it’s not enough to simply bring down the cost of an item. The delivery time and manner in which the customer is dealt during times of sales and support are important as well. It is a measure of that value that should be
captured by the metrics (e.g. market share, customer satisfaction, customer loyalty, customer acquisition) representing this perspective. In this perspective, managers must first determine core measures that will describe the successful outcomes of a well-formulated and implemented strategy. They have to also identify what are the attributes that the customers value and choose the value proposition that they want to deliver to the targeted customers. Today, many companies have a corporate mission that focuses on the customer. c. Internal Business Process Perspective The internal business process perspective provides a view of what the company must excel at to be competitive. Kaplan and Norton recommend that, "companies also attempt to identify and measure their company's core competencies, the critical technologies needed to ensure continued market leadership."
In this perspective, the managers must identify the internal processes that are crucial to their organization and develop the best possible measures with which to track the organization’s progress. These processes should help them deliver superior value to their customers and achieve financial targets. The Balanced Scorecard go beyond the simple assessment of existing processes, and usually identifies new processes that the organization should
implement in order to be successful.
innovation processes measures, the Balanced Scorecard provides managers with a set of tools that does not only reflect the short term, but also gives insight about the longerterm. d. Innovation and Learning Perspective Kaplan and Norton underscore the importance of innovation and learning in their statement that, "a company's ability to innovate, improve, and learn ties directly to the company's value." While the financial perspective deals with the projected value of the company, the innovation and learning perspective sets measures that help the company compete in a changing business environment. This is of principal interest to the CEO and the architects of the long-range business plan. Their focus for this innovation is in the formation of new or the improvement of existing products and processes. This perspective looks at how effectively the organization can redesign and implement new business process, introduce and exploit new technology and adapt to changing conditions in general. Thus the measures in this perspective are truly the enablers of the other three perspectives. These measures are like the roots of a tree that will ultimately lead through the trunk of internal process to the branches of customer results and finally to the leaves of financial returns. and gain knowledge. Metrics of this perspective can be adaptability, employee satisfaction, and willingness to share
With the financial, customer and internal perspectives, managers are able to identify the gaps between existing organizational resources and the ones required to be successful. The only way to close those gaps is for the organization to judicially invest in employees and information technology and to design the most appropriate organizational structure that could support their strategy.
4. The steps of implementation are: Identifying and defining Key Performance Indicators from the multiple perspectives: First the multiple perspectives are to be identified, which can be, as: Financial Measure, Customer Measure, Internal Process and People (Learning & Growth). After this the main task is to identify the Key Performance Indicators (KPI) in each of these multiple perspective. a. Identifying Key Action Areas b. Implementation of Key Action Areas c. Monitoring Key Action Areas 5. The advantages of the Balanced Scorecard: a. First, the measures incorporated in the Balanced Scorecard are grounded in the organization’s strategic objectives and competitive demands. Therefore, this set of critical indicators helps the organization focus its efforts on the strategic vision. b. The four perspectives of the Balanced Scorecard enable organizations to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they need for future growth. The Balance Scorecard then becomes the cornerstone of the organization’s current and future success. Also, by balancing external and internal measures, there is no trade-off among key success factors.
c. Finally, managers can use the Balanced Scorecard to: ־clarify and gain consensus about the strategy; ־communicate the strategy throughout the organization; ־align departmental and personal goals to the strategy; ־link strategic objectives to long-term targets and annual budgets; ־identify and align strategic initiatives; ־perform periodic and systematic strategic reviews; ־obtain feedback to learn about and improve strategy. 6. Potential Problems with a Balanced Scorecard: a. The creation of a Balanced Scorecard involves a considerable amount of time on the part of everyone whose performance will be measured; the selection of appropriate measures for the four perspectives too is very time consuming. This is simply due to the fact that there are a large number of potential goals and targets and even more ways to measure them. People are likely to disagree about which objectives to measure and how to measure those objectives, and it will take time before consensus is achieved. b. The time factor involved in designing a Balanced Scorecard can be considerable since it involves a lot of people in the organization. Their commitment is important not only in building the Balanced Scorecard but especially in implementing and using it. Although a Balanced Scorecard may be well designed, lack of participation
and commitment on the part of staff will make the scorecard useless. c. Finally, there is always a chance that too many measures will be selected. This is a problem because it is very difficult to track a large number of measures. Furthermore, some of the measures selected may be objective, such as employee turnover rates, and other measures may be subjective measures, such as employee morale or quality time spent with customers. therefore, are more prone to error. how can they be made more reliable. The subjective measures, by definition, involve somebody’s judgment and, Consequently, there is a question whether subjective measures should be used and if so
1. Is Performance appraisal given adequate importance in your organization?
A – Yes B – No C – Partly Particulars A B C No. of respondents 15 5 10 Percentage 50% 16.7% 33.3%
The above chart shows that 50% of employees are satisfied, 16.7% of employees are not satisfied and 33.3% of employees are partly satisfied with the importance given to the performance appraisal given in their organization.
2. Is Performance appraisal really helpful in developing your performance? A – Yes B – No C – Partly Particulars A B C No. of respondents 20 0 10 Percentage 67% 0% 33%
The above chart shows that performance appraisal is really helpful in developing their performance for 67% of the employees and partly helpful for 33% of the employees.
3. Have you ever had discussion regarding Performance appraisal with your manager? A – Yes B – No Particulars A B No. of respondents 25 5 Percentage 83% 17%
The above chart shows that 83% of the employees are having discussion and 17% of the employees are not having discussion with the manager regarding performance appraisal.
4. The results you have faced at the end of annual review A – Promotions B – Increments C – Additional responsibility D – All the above E – None of the above Particulars A B C D E No. of respondents 11 6 4 5 4 Percentage 37% 20% 13% 17% 13%
The above chart shows that 37% of the employees are getting promotions, 20% of the employees are getting increments, 13% of the employees are getting additional responsibility, 17% of the employees are getting promotions, increments and additional responsibility and 13% are not getting any benefits at the end of annual review.
5. Is performance appraisal helpful in strengthening work relationship through personal effectiveness? A – Yes B – No Particulars A B No. of respondents 27 3 Percentage 90% 10%
The above chart shows that performance appraisal is helpful for 90% of the employees and not helpful for 10% of the employees in strengthening work relationship through personal effectiveness.
6. Are you informed about your performance parameters? A – Yes B – No Particulars A B No. of respondents 20 10 Percentage 67% 33%
The above chart shows that the performance parameters are informed to the 67% of the employees and are not informed to the 33% of the employees.
7. Have you faced any problems during process of performance appraisal? A – Yes B – No C – Partly Particulars A B C No. of respondents 9 12 9 Percentage 30% 40% 30%
The above chart shows that 30% of the employees are facing problems, 40% of the employees are not facing any problems and 30% of the employees are facing some problems during the process of performance appraisal.
8. In your opinion performance appraisal in Coca-Cola is? A – Very effective B – Average C – just a ritual Particulars A B C No. of respondents 14 10 6 Percentage 47% 33% 20%
The above chart shows that performance appraisal is very effective for 47% of the employees, average for 33% of the employees and its just a ritual for 20% of the employees.
9. Is performance appraisal continuous process in Coca-Cola? A – Continuous process B – Just a formality C – No match relevance is attached to continuing D – Can’t say Particulars A B C D No. of respondents 11 6 7 6 Percentage 37% 20% 23% 20%
The above chart shows that performance appraisal is a continuous process for 37% of the employees, just a formality for 20% of the employees, not a continuous process for 23% of the employees and 20% of the employees can’t say about it in Coca-Cola.
10. According to you what are the major barriers for success performance at your work place? A – Lack of motivation B – Lack of skills C – Lack of proper work D – All the above Particulars A B C D No. of respondents 10 7 5 8 Percentage 33% 23% 17% 27%
The above chart shows that the major barriers for success of performance at the work place are lack of motivation for 33%, lack of skills for 23%, lack of proper work for 17% and lack of all these for 27% of the employees.
11. What mostly motive to best performance in Coca-Cola? A – Working environment B – subordinate performance C – Encourage by superiors D – All the above Particulars A B C D No. of respondents 11 6 7 6 Percentage 37% 20% 23% 20%
The above chart shows that working environment for 37%, subordinate performance for 20%, encourage by superiors and all these for 20% of the employees are the mostly motive to best performance in Coca-Cola.
12. Are you satisfy with the functioning of rewards/recognition mechanism at Coca-Cola? A – Very high B - High C – Average D – Below average Particulars A B C D No. of respondents 7 10 7 6 Percentage 23% 34% 23% 20%
The above chart shows that 23% are satisfied very highly, 34% are satisfied highly, 23% are satisfied average and 20% are satisfied below average with the functioning of rewards/recognition mechanism in CocaCola.
13. On what basis Coca-Cola evaluating the performance? A – Based on work B – Based on quality of work Particulars A B No. of respondents 13 17 Percentage 43% 57%
The above chart shows that Coca-Cola evaluates the performance based on work for 43% of the employees and based on quality of work for 57% of the employees.
14. The prime objective of performance appraisal in Coca-Cola is? A – Performance exists B - Performance exists with job to evaluate C - To determine promotion/transfer Particulars A B C No. of respondents 14 9 7 Percentage 47% 30% 23%
The above chart shows that the prime objective of performance appraisal in Coca-Cola is performance exists for 47%, performance exists with job to evaluate for 30% and to determine promotion/transfer for 23% of the employees.
15. If given a chance will you change performance appraisal system in Coca-Cola? A – Total change B – Partial change C- There is no need of change Particulars A B C No. of respondents 5 14 11 Percentage 17% 46% 37%
The above chart shows that if a chance is 17% will totally change, 46% will partially change and 37% wont change the performance appraisal system in Coca-Cola.
1. It was found that feedback is given only to the some employees after the appraisal process . 2. It was observed that the organization is helpful in improving their performance. 3. It was found that the counseling programs are helping to improve their skills. 4. It was found that the appraisal system is helpful in strengthening work relationship. 5. It was found that the reward system is satisfying only few members. 6. It was found that the employees are happy with the half-yearly system of appraisal. 7. It was found that the appraisal is helping the employees to generate new ideas.
1. The company may design a one single format, arrange the
comments in such a way i.e. starting from down level to top-level. 2. Separate the forms of Customers/Vendors and Self Appraisal. 3. Arrange counseling programs to improve their skills. 4. Give feedback to the employees to develop their performance. 5. It is better to have separate Format influences. 6. Keep all the comments as confidential. at each level to avoid
Success of implementation of appraisals depend on the effectiveness of role of HR managers. It is not an easy task to implement and maintain Performance Appraisals. For this the company have to train all their personnel whoever involved in executing the Appraisals. In the initial stage, the company take the help of out-side Consultants’ help and expertise.
Coca-Cola’s growth over the years reflects in the actualization of its mission and it stands for the professional management of commercial enterprise and its planned growth, through the effective use of knowledge and resources at command to create substantial surpluses and contribute to the quality office as a valued corporate citizen.