July-September, 2008

Developing Performance Appraisal System for Performance Leadership in Banks
Dr. Shambhu Nath Chowdhury*

*Senior Manager, Personnel Administration and HRD, Paschim Banga Gramin Bank, Howrah


therefore. primarily. although mostly such self-appraisal is more of a communication of achievements. and disciplinary actions. UCO Bank. traditional PAS fail to develop employees and organizations.c k CAB CALLING the organizational goals. appraisals frequently fail to deliver a dependable measure of the value and contribution of employees who are assessed. Corporation Bank. internal administration and training requirements in great detail. in general. awareness of social environment. Most of the PSBs have an Annual Appraisal System that is historic in nature and documents the past activities. Many appraisal systems examine performance on traits exhibited by individuals. the appraisal system in PSBs. reward administration. the PSBs are lagging behind in this area too. like many fields of organizational development. There are one-dimensional models. The bank started the system with a self-appraisal by the appraisee. This traditional PAS results in unawareness of employees of their strengths and weaknesses in relation to their capabilities in different positions in the organization throughout their career. Onedimensional model or the traditional model is based on the single factor of performance and the entire focus is on what to be achieved. But developing and implementing a PAS seems overdue and vitally important. But. Indian Overseas Bank has a system in which a branch manager gives a self-appraisal on business growth. Employees can 63 . Review of performance on trait criteria can be justified if the traits relate to the individual's job. In short. The 'How' factor of achievement is not looked into in this type of model and is perhaps not fit for today's world of business where short term survival and long term survival is equally important. It is a one time annual affair only. Studies of the operating system of the successful organizations. a model is a guide that indicates how best competencies could be fit into a Performance Appraisal Process. mixed models and three-dimensional models. Union Bank of India has an Models of Performance Appraisal In performance appraisal. Due to these drawbacks. One Dimnsional Model In one-dimensional model people are not aware whether an achievement is one time and situational. All these are defined for different categories of roles and the assessment has to be made on a five-point scale. Several of the public sector banks (PSBs) have changed their PAS or are in the process of changing them. customer service. State Bank of India has recently adopted an open system of appraisal. Performance Appraisal Systems in Indian Banks Banking services is one sector where a great degree of attention is being paid to Performance Appraisal Systems. human skills and conceptual skills. leadership. a development-oriented appraisal form. Several banks also have self-appraisal as a part of performance appraisal. reveal that a good PAS is the corner stone to navigate an organization successfully in this globalized environment of uncertainty and continuous change. Examples of such traits might be oral communication. as an important component of Performance Management System. Allahabad Bank has introduced a system that aims in helping officers to identify their strengths and weaknesses and encourage improvement of performance on the job. trait appraisal can cause misunderstanding and disagreement between the manager and his subordinates. organization and planning. PAS is traditionally used as a mechanism of controlling employee through salary administration. thus. Study of the format of annual appraisal of many of the PSBs reveal that they are basically uniform in character with emphasis in historical events and little or no importance for future growth. Dena Bank and Bank of Baroda has introduced similar self-appraisal formats. initiative. Punjab National Bank has. it is not much helpful because it does not focus on exactly how the individual has been deficient and specifically what can be done by him to improve his performance. is basically dysfunctional. In comparison with the new generation banks and progressive organizations. If a manager tells his subordinate that he needs to demonstrate more leadership qualities and show more initiative on projects. There are ten different formats available for ten different categories of employees. Central Bank of India. The PAS. is yet to be conceived and made operational. Another feature of traditional PAS is its confidentiality. They have. The traditional PAS fails to identify the potentialities of employees in performing the new roles in new positions. July-September. This is basically because of the confidential nature of the appraisal. promotion. However. 2008 appraisal system in which the reporting officer is required to assess each of his appraisee officers on technical skills. Its associate banks are likely to follow the same after detailed experiences of State Bank of India are available. developed and employed such system and harnessing maximum benefits.

It employs a wider. The customer is involved in setting the performance contract and on giving feedback to the performance review. outputs Define a set of key objectives against the accountabilities Review performance against the key objectives Model 1: One Dimensional Model Mixed model A performance appraisal process that combines planning. They should focus more on performance and less on personality. Here. There are enough examples of the loopholes of the one-dimensional model. Three Dimensional Model The next model takes another dimension besides objectives and competencies. The Job Define what results have to be achieved from an individual. The Define what results have to be achieved Performance Contract The Job Define what results have to be achieved Performance Contract Customer Expectation Key Objectives + Job Key Competencies Define how results have to be achieved Accountability Define a set of key objectives + + Define asset of behavioural objectives against key competencies Key competencies Define how results have to be achieved Customer Review performance Feedback against key objectives and key competencies Model 3: Three Dimensional Model Besides. It shows what the employees achieved and how they have achieved it. i.fits in this model. there will be no provision of editing or rectification after the date of submission. seven days the entire feedback should reach the appraisee for developing weak (opportunity) areas. personality bias and other sort of biases. its time to make PAS IT enabled in such a way that once submitted online. This will reduce the criticism of bias or alteration of opinion by the reviewer in subsequent period. Appraisees may also be trained suitably for providing accurate rating in their self appraisal. When the whole banking industry is going for CBS. These mixed models assess and reward both results and competencies demonstrated on the job. a more comprehensive tool to describe the performance expected 64 . A 'competency based' approach brings a different perspective to performance management. The following is a one-dimensional model where the key stress is on what is to be performed. The leniency error and the 'hallo' effect (a good perception in one area leads to rating good in all areas) and thorn effect (a biased perception in one area leading to bad rating in all areas) in appraisal system can be corrected only through appropriate training of the rater. performance is defined not only in terms of what is to be achieved but how it is to be achieved and what competencies must be utilized as is depicted in the following model. Accountabilities i.inputs Review performance against key objectives and key competencies Model 2 : Mixed Model The mixed model represents a more powerful and long lasting approach to performance management than what one-dimensional objective-based approach. The most important dimension customer .e. Mixed model or the competency based performance models for their added advantage are becoming the performance management model of the future. the raters (appraiser and reviewer) should be adequately trained so that they are capable to overcome gender bias.e. The objective portion of the PAS should generate immediate feedback and the system should be so oriented that within a specified time of say. managing and reviewing both results and competencies is called a mixed model.c k CAB CALLING July-September. 2008 adopt practices that can boost their performance in the short run making colossal losses for the future.

Typical Evaluation Sheet for Competency Appraisal SL Skill Total Marks Marks Allotted by Remarks for extreme points in quality fields Appraisee Appraiser Reviewer 1 Education a) Academic b) Professional 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Experience Intelligence Leadership Communication Team Building Computer Savvy Ethics Willingness Conflict Mgt. as individuals. we take to reach planned objectives. Performance Elements and Performance Standards : Performance elements tell us what we have to do and performance standards tell us how well we have to do. or organizational performance that is not critical element for individual or group performance evaluation but successful performance may earn credit at individual and group performance level. The number of CEs ranges from a minimum of three (3) and a maximum of eight (8). Decision making Cooperativeness Innovation Tenacity Industry Knowledge Total 10 05 10 05 05 05 05 05 05 10 05 10 05 05 05 05 100 65 . Concept of Ideal Performance Plan (IPA) : An ideal performance plan should have a proper blend of critical. 2008 Outstanding Performance Level (OPL) : who scores 100% Standard Performance Level (SPL): who scores 60% or above Acceptable But Poor Performance Level (ABPPL): who scores 50% or above Unacceptable Performance Level (UPL): who scores less than 50% l l l All appraisees should perform at least Standard Performance Level. and additional performance elements. Non Critical Elements (NCE) : NCE is an assignment or responsibility of such importance that unacceptable performance in these elements would make our (Group or Unit) performance altogether unacceptable. noncritical. the following skills may be evaluated with the bank deciding on the number of marks to be allotted on factors as under or may be altered to suit to its specific needs and objectives. Activity Trap : Many employees/officers remain busy and active but the ultimate outcome seldom adds to any value addition to the organization. team. Performance is about everyday actions and behaviours which. Critical Elements (CE) : CE is an assignment or responsibility of such critical importance that unacceptable performance in these elements would make our (appraisees) performance altogether unacceptable. However. The people who are entrapped in activities without understanding the purpose of business are said to be in activity trap. This is non critical at individual level but critical at group level. Additional Performance Elements (APE) : An APE is a dimension or aspect of an individual. such assignments are non-threatening and an intelligent failure would not be minus mark on performance. every bank would want most of her employees and officers endeavour to reach Outstanding Performance Level so that the bank becomes a high performing and high value organization as embodied in its Mission and Vision statement. In the competency evaluation.c k CAB CALLING Guidelines for Building a Model Performance Appraisal System Performance is concerned with means as well as ends. inputs (competence) as well as outputs (results). There are three performance elements. Example of APE: an employee/officer volunteered to work in a new project that requires new skills. Such plans should have provisions of apprising employee performance against planned agreement on elements at five levels based on (elements to be weighted) according to specific needs of the organization: l July-September.

The mixed model represents a more powerful and long lasting approach to performance management than just an objective based approach.Personnel Appraisal. Wexley: “ Behavioural Observation Scales for Performance Appraisal Purposes”. These mixed models assess and reward both results and demonstration of competencies. Conclusion The typical traditional Performance Appraisal Process of the 1990s focused almost entirely on defining what is to be achieved.c k CAB CALLING July-September. Appraisal should be on parameters which are important to the organization and really needed. Oxford & IBH Publishing Co. CPE. Gary P. The Performance Appraisal System must not be considered as perfect and to remain so in the long term. Prentice Hall of India Private Limited (1986). 30. Each bank may devise a general template to suit its specific needs. subordinates. pp 268-271 2. NCPE and APE should be determined by the specific bank to suit their need and appropriate weightage may be fixed. Staudohar: Personnel Management & Industrial Relations. Multiple feedback system including feedback from peers. Reference : 1.V. Lathan and Kenneth N. The Performance Appraisal System must lead to action. 4. National Institute of Personnel Management.2 (Summer 1977). Meyer: “The Science of Telling Executives How They're Doing”. not which are easy to measure. Dale Yoder.202-203. However. pp. It uses a wider. p-3 T. 2008 Typical Planning & Evaluation Sheet for Various Performance Elements : : Critical Performance Elements (Minimum 3 & Maximum 5) NCPE : Non Critical Performance Elements (Minimum 2 & Maximum 5) APE : Additional Performance Elements Depending on the strategic HR plan. pp. Performance 3.G. Templates for evaluation of CPEs for branch office as well as administrative staff may be developed depending on the specific circumstances of a bank. Ltd. (Source : Regent Global Business Review) 66 . customers may give vital clue for development. July-September 2003.(1988). Competency-based approach brings a different perspective to performance management. Fortune. CPE is defined in terms of the results and also in terms of behaviours employees use to achieve the job results.Rao: Human Resources Development in Banks Performance Appraisal Systems in Banks. Personnel Psychology. Nayak: Personnel Today Performance Appraisal. 5. both what employees actually deliver and how they do it. January 1974. Appraisal should be at least quarterly so as to take corrective feedback for performance improvement. Vol. Paul D. Pvt. No.255-256 Herbert E. today competency based Performance Management Schemes are plentiful and becoming the model for the future. Appraisal for its own sake should be abandoned. The allotment of performance elements to different departments/units may be different for different banks based on their own strategy.104 N. p. more comprehensive language to describe the performance expected from an employee.

Sign up to vote on this title
UsefulNot useful