ASSIGNMENT

PERFOMANCE MANAGEMENT AND APPRAISAL

1) What is performance management planning? How does
planning affect a manager?
 Meaning of performance management planning.
Performance management planning is the process of creating and
setting forth the plans for managing the performance of employees in
order to achieve organizational success. The mission of the organization
is executed through people and, therefore, overall understanding of the
mission is a precondition to PM planning. Hence, a clear idea of how
human capital works is important before we plan the performance.
Every one of us work for basic needs as explained by Maslow in his
famous ‘hierarchy of needs’ for the basic ones as also for the higher
needs mentioned therein. What this means for PM planning is that the
individual’s goals are an important input into PM planning.
 Explanation of how planning affects a manager.
Planning helps the manager in several ways:
 Because of planning, everyone focuses on achieving goals and knows
what they are doing and have to do. This means that the manager, who
is responsible for the targets, can ensure that these are achieved. It also
makes it possible to delegate and decentralize work so that the manager
himself/herself get more time to focus on what matters to him/her the
most. It relieves the manager from routine jobs and gives an opportunity
for planning and coordinating, besides looking at the bigger picture such
as growth opportunities and how these can be utilized.
Each person’s work is mapped and linked to the organization’s goals
and, therefore, it becomes easy to track the performance and make
corrections at any time. Mapping also helps to ensure that no goal is left
unattended. Thus, it helps in integration within the organization. It also
gives a clear indication of the competencies of each individual to undertake
the mapped portion of the job. This helps in employing the workforce more
scientifically.
2) Define performance appraisal. What are the dimensions of
performance appraisal? Describe the characteristics of
performance appraisal.
 Define performance appraisal.
PA has been defined in several ways. Let us see some of them:
 “Performance appraisal is the systematic evaluation of individuals with
regard to their performance on the job and their potential for
development.” (Dale S. Beach, 1980).
 “Performance appraisal is a method of evaluating the behaviour of
employees in the work place, including both the quantitative and
qualitative aspects of job performance.” (Carrell and Kuzmits, 1982).
 “Performance appraisal is the process of evaluating the performance
and qualifications of the employee in terms of requirements of the job
lot which he is employed, for the purposes of administration including
placement, selection for promotion, providing financial rewards and
other actions which require differential treatment among the members
of a group as distinguished from actions affecting all members equally.”
(C. Heyel, 1973).

 Dimensions of performance appraisal.

PA in terms of various dimensions such as:
 Output or result dimension: This pertains to the actual results delivered such as
profit created, number of customer complaints reduced, innovations made, etc.
 Input dimension: It can also be measured in terms of cost reduced, raw
materials changed, time of the project reduced or a process that has been changed,
which created lower input. Input dimension often, though not always, is related to
cost and time reduction.
 Time dimension: It can be seen from the time dimension such as in a quarter, in
a year, during the project period, etc.
 Focus dimension: It can be seen from a focus dimension such as the sales
achieved for a new product, which is usually more difficult than selling an
established product, thus creating focus on introduction of the new product.
Similarly, the focus can be on corporate social responsibility, ethics, quality, and so
on.
 Quality dimension: This pertains to performance in terms of quality such as
defects, process, standardisation, etc.
  Characteristics of performance appraisal.
Some companies recognize the need to render employee feedback
regarding performance. One of the methods of providing performance
feedback is through a performance appraisal.
The major characteristics of performance appraisal are:
 Appraisals match the job descriptions: Performance appraisals must match the
job descriptions and standards set for performance objectives. For example, an
employee who does data processing should be assessed based on the number of
errors and timeliness of work as these are the standards set for that particular
job. It may be unfair to measure a data-processing employee on phone skills if
that is not part of the job description.
 Appraisals are legally compliant: Appraisals must be able to stand legal tests of
reliability (questions must yield the same results for all employees if repeated
more than once) and validity (the appraisal measure what it is designed to
measure). For this reason, some companies have their appraisals developed by
third-party consultants, who are specialists in this area.
 Appraisers must be trained: The supervisor or manager conducting the
appraisal must be trained in the use of the evaluation tool and conducting the
appraisal. For example, dispute may arise if the employee disagrees with the
outcome and knowing how to deal with conflict is an important tool. Explaining
the ratings of the appraisal and discussing future plans for improvement with the
employee require good communication skills.
 Appraisal systems require follow-up: It is important to the organisation and the
employee to provide consistent monitoring and follow-up after the formal
appraisal is given. For example, if the employee scored high with little need for
improvement, do not take that performance for granted. Instead, continue to
train the employee and mentor him/her for continuous improvement.The
employees who require improvements will need clearly defined plans, with
regular follow-up and feedback.
 Data-generation system: Performance appraisal is a data-generation system for
strategy conceptualisation and implementation.

3) Describe the traditional methods of performance appraisal.

 Traditional methods of performance appraisal.
 From the name itself, one can identify that these are the methods that
are most commonly used. The traditional methods of performance
appraisal are:
 Essay appraisal method
 Straight ranking method
 Paired comparison method
 Critical incidents method
 Field review checklist method
 Graphic ratings scale method
 Forced distribution method.
Essay appraisal method
In the essay appraisal method, the appraiser describes the performance
of an individual in the form of a short essay. He covers what the
employee did, what he did not, what his strengths and weaknesses are
and what he should improve upon. When facts and evidences are used
objectively, it is a fairly accurate method to evaluate performance.
Straight ranking method
Ranking methods compare employees with each other, resulting in an
ordering of employees in relation to one another. Thus for example, if a
manager has 10 people working under him, he ranks them from one to
10.
Paired comparison method
A better technique of comparison than the straight ranking method,
this method compares each employee with all others in the group, one
at a time. Thus the manager will say that No. 1 is better than Nos. 4, 6,
and 7, but worse than others. After all the comparisons on the basis of
the overall comparisons, the employees are given the final rankings.
These comparisons can be accumulated to give an overall rank. This
overcomes the problem related to judging several people in an order.
Critical incidents method
This method describes how the employee behaved during critical
incidents, with respect to performance over a period of time. Thus the
manger will, for example, record ‘you worked late consistently for one
month to complete the project in time’ or ‘even when you knew that
the project completion demanded you working late, you left the
workplace, leaving your colleagues to complete the tasks in time’.These
 are then matched with the employee focusing on actual behaviour
rather than on qualities.
Field review checklist method
When two or three managers evaluate their teams doing the same job,
for example, three managers of a coffee chain evaluating employees of
their respective outlets, which are similar in nature, there would be
differences due to individual perceptual bias especially when we use
the essay, rating or graphic rating methods.
Graphic ratings scale method
One of the most common methods of performance appraisal, the
graphic ratings scale method requires an evaluator to measure on a
scale, the angle to which an employee reflects a particular trait,
behaviour, or performance result. Evaluating forms comprise a number
of scales, each relating to a certain job or performance-related
measurement, such as job skills, responsibility or quality of work. Each
scale is a band of definite points or anchors, which range from high to
low, from good to poor, from most to least effective, and so forth.
Scales mainly have five to seven points, although they can have more or
less.
Forced Distribution Method
Forced distribution method has its roots in normal distribution, a topic
found in statistics. The employees should normally be very good, good,
average, below average, bad, etc. In other words, the rating should be
evenly spread. In forced distribution method, the manager is told to
ensure that people are evenly spread. Thus, he has to fit some
percentage in very good, some in good, etc., with some discretion. It is
generally applied to several components taken together rather than
one component. For example, you do not do force distribution for
honesty separately and team spirit separately. You take the person’s
performance as a whole and then do the forced distribution.

4) What is the performance feedback? Why is it used? What are

the levels of performance feedback?
 What is performance feedback?
Feedback is the provision of information to people on how they have
performed in terms of results, events, critical incidents and significant
behavior during the period under review. Feedback is a useful tool for
 indicating whether things are going in the right direction and for
redirecting effort. Your objective in giving feedback is to provide
guidance by supplying information in a useful manner, either to support
effective behavior or to change the not-effective behavior and, thus,
guide someone back on the track towards successful performance.
When a goal is set and an individual performs, it is possible that he
deviates from it advertently or inadvertently. Moreover, it is difficult for
a person to observe the results of his own actions. This is more so in
areas where results cannot be fully defined empirically. For example, it
is possible to define that an appropriate behaviour is ‘give full
information to the customers on the product’ and you may even have a
detailed manual on it. The person in question would explain what he
thinks best and also give the manual but may not be pleasing in his
mannerism while giving feedback, resulting in negative feedback about
the person from the customers.

 Use of performance feedback.

Feedback is the provision of information to people on how they have
performed in terms of results, events, critical incidents and significant
behavior during the period under review. Feedback is a useful tool for
indicating whether things are going in the right direction and for
redirecting effort. Your objective in giving feedback is to provide
guidance by supplying information in a useful manner, either to support
effective behavior or to change the not-effective behavior and, thus,
guide someone back on the track towards successful performance.
When a goal is set and an individual performs, it is possible that he
deviates from it advertently or inadvertently. Moreover, it is difficult for
a person to observe the results of his own actions. This is more so in
areas where results cannot be fully defined empirically. For example, it
is possible to define that an appropriate behavior is ‘give full
information to the customers on the product’ and you may even have a
detailed manual on it. The person in question would explain what he
thinks best and also give the manual but may not be pleasing in his
mannerism while giving feedback, resulting in negative feedback about
the person from the customers. The person in question may not know
about it but the supervisor may notice it and gain information about it
from the peers of that person or directly from the customers. It is
 possible for the person in question to improve his performance if he is
told about the problem. Since he has not realized the problem, it is not
possible for the person to improve unless he is told. Hence, feedback is
important not only for the individual but also for the organization
equally.
Performance feedback is, generally, in the form of an annual
evaluation, that is, performance reviews are scheduled annually, in
which your performance is measured against pre-established criteria.
This type of an appraisal review offers both the parties – the giver and
the receiver – an opportunity for a formal, documented
communication. Feedback serves as a cornerstone to help employees
improve their performance in any organization. For example, the entire
salaried-merit-distribution plan is often based on the annual
performance review that people receive from their supervisors. In
addition, many career-altering decisions, such as promotions, transfers,
job placements, out-placements, selections, and rejections are typically
based on a person’s annual performance feedback. Though the concept
of immediate feedback or ‘feedback should be given as soon as a
problem arises’ is true, in reality, feedback that creates a linkage to the
above mentioned aspects such as reward are usually given only once in
a year. We call this formal performance review-based feedback.

 Levels of performance feedback.

There are six levels of performance feedback. These are:
1. No feedback: Though it is easier to implement it is detrimental to the
employee and the organization.
2. No formal feedback or documentation: Here, feedback is given but it is
not a formal one. Reward is usually not tied to performance feedback.
However, this tends to confuse the employees in the long run since they
see some of their colleagues getting promotion while others do not get it,
and they are not able to get a clear picture of it. It is susceptible to
misinterpretation and challenge.
3. Formal feedback system including written documentation, but no
personalized communication: Several organizations do this though it
defeats the purpose of PM. It also does not help in creating employee
engagement and militates against the principle of justice.
 4. Formal feedback system including personalized communication from
supervisor to subordinate: This level of feedback combines the
quantitative performance measures and personalized feedback. The
performance feedback form is designed in such a way that the supervisor
is required to personalize certain aspects of the feedback that the
individual receives. The more personalized the performance feedback
becomes, the more meaning it provides to the individual receiving it. It
helps in getting the recipient to understand and accept the information
about his/her performance.
5. Formal system, multi-source: For example: 360-degree feedback and
team feedback. In this system of feedback, an individual receives feedback
from almost all the people who work with them. Feedback is provided
from different directions, which include peers, subordinates, supervisors
and even the individuals themselves. The next unit covers this in detail.
6. Self-directed feedback: As the name suggests, self-directed feedback is
conducted by the individuals themselves making them singularly
responsible for their improvement. It is intended to be non-evaluative in
its design, similar to the 360-degree and team feedback systems. Self-
directed feedback is intended to help the individual’s personal
development in such a manner that is most acceptable to him/her. Self-
directed feedback can be one of the best means of identifying and
understanding perceptual differences. The main goal of self-directed
feedback is to explore the perceptions of others about an individual’s
performance. The objective is not only understanding these perceptions
but addressing them as well. Like many other aspects of interpersonal
communication, awareness is the key to understanding.

5) What is meant by 360degree feedback? Explain its purpose.

What are the advantages and disadvantages of 360degree
feedback?
 Meaning of 360 degree feedback.
The concept of 360-degree feedback has much to offer in the present
environment. Unlike the traditional appraisal model, the 360-degree
approach does not rely exclusively on the manager or the superior to
provide feedback to the employees. It elects multiple entities to
 provide feedback to selected organizational members. This community
includes superiors, peers, and co-workers in support areas,
subordinates, external customers (of the company’s products) and
internal customers (of the unit's work). Apart from managers, the
influence and authority of 360-degree feedback has made engineers,
graduates, pilots, crew-members, sales representatives, human
resource executives, customer service executives, secretaries and
supervisors part of the evaluation and appraisal process. The 360-
degree feedback is mainly meant for the development of the appraise
and is not used for monetary incentives or salary corrections. The main
objective of this method is to identify the training and developmental
needs of the appraise.

 Purpose of 360degree feedback.

The purpose of designing the feedback form (basically a survey) is to build it from
the role played in key skill areas, split these into elements, and evaluate each
element carefully, that is, give feedback with respect to each question. A 360-
degree feedback helps an organisation to take decisions in the following areas:
Self-improvement and individual analysis
‘Associate’ training program
Team-construction
Managing performance
Strategic or planned organization development
Validation of training and other initiatives
Reward management.
Annual assessment by way of 360-degree feedbacks assists in the management and monitoring
of values, approving the prospective goals and assignment of responsibilities and tasks. A 360-
degree performance appraisal is usually integrated into the yearly compensation and grading
reviews, which normally leads to business planning for the next financial year.
A 360-degree performance evaluation commonly reviews every individual's performance
against the goals and strategies for the previous financial year that were approved and agreed
upon at the previous evaluation sessions. Performance evaluations through a 360-degree
appraisal are also necessary for developing goals and business strategies for individuals, critical
jobs, and for the association as a whole.
Moreover, since a 360-degree feedback provides a proper, confirmed, frequent and regular
review of an employee's performance, and objectives for further development, it is essential for
staff motivation, bringing about a change in the attitude and behavior of the employee and
discussion and implementation of individual and organizational aims. This will encourage
positive connections between the administration and the employees.

 Advantages of 360degree feedback.

The 360-degree feedback technique, which derives information from the employee’s
environment, is now often used as a development or training tool and is usually not
 linked to salary. It can work wonders for organisations that are moving towards an
open, supportive and fair culture.
Advantages of 360-degree feedback
The advantages of 360-degree feedback are:
 Collective opinion gives perfect, objective and over-all ideas.
 Leadership qualities are perfectly judged by peers and subordinates rather than
seniors.
 When a number of colleagues express the same comment, it becomes difficult to
ignore.
 It can lead to positive behavioural change.
 It can be supportive for people who underestimate themselves

 Disadvantages of 360degree feedback.

Disadvantages of 360-degree feedback

The disadvantages of 360-degree feedback can be summarised as follows:
 It is more time-taking and costly, thus the technique is often restricted to the managerial level.
 If too many evaluators are involved, it can be difficult to work out the result.
 It can be critical, unless handled carefully and delicately.
 It can create an environment of doubt, unless managed transparently and sincerely

6) Write a brief note on ethics in performance management.

 Importance of ethics in PM.
So far, we have had an overview of ethics and its relevance in the organisational
context. In this section, we are more concerned about how it can be incorporated in
PM and how PM can be made more ethical. Since most people attach a high value
to ethics and all people are affected by performance management in an
organisation, we can conclude that all people in the organisation would be
concerned about ethics in PM. Also PM acts as a guard in business ethics by
including that as an evaluation criterion, i.e., PM reports whether an individual has
the ethical standards that are expected of him as defined by business. PM affects
certain key aspects of an individual. It affects the career, life, financial rewards, and
retrenchments and through these, the ‘self’ image of an individual. This underscores
the importance of ethics in PM.
 Concepts of PM
Concept of PM as related to ethical aspects: Although the concept of PM has been explained
earlier, a brief revision in the ethical context would be in order. The practice of PM is a
methodology that can be traced back several centuries. But does the existence of a method
justify its existence itself? What are the grounds to validate PM? For instance, conventional
wisdom might indicate that PM, in its various forms, is a natural outgrowth of an economic
system based on profit maximisation, economic efficiency, and economic productivity. It
probably emerged during the era of scientific management (refer to Management Process and
Organisational Behaviour material to know more about scientific management) to measure
productivity. In fact, through PM, we are trying to measures the skill of an individual and,
therefore, economic efficiency. We may find that the cost of designing and implementing PM is
greater than its benefits, in which case, the entire system is questionable from an economic
perspective. It could turn out that we are simply relying on economic indicators to judge human
performance. There can be other criteria to judge the worth of a person. Kant, a noted author on
philosophy and ethics believed that motive or intention is a better measure of a person's
character than is the performance of a given action which tends to question the premise of PM
itself. In earlier units, we have discussed the existence of a view that PM is not desirable. On
the other hand, Aristotle’s view is that moral worth is derived from the repetition of virtuous
activities, i.e., end actions can be assessed. Besides, economic efficiency, PM is also used to
measure socialisation skills, for example, a teacher in primary school is as interested in
measuring 'self-control' and 'peer acceptance' as he/she is interested in measuring
mathematical skills and in many ways the manager is also as interested in these. Thus
socialisation can be, and is, evaluated without any specific concern for eventual economic
impact. This means that PM is not restricted to any one area of human activity and is pervasive
and hence fully justified in the organisational context too. Thomas Jefferson spoke about
‘natural aristocracy' or a natural order of things, i.e., some people are destined to lead and
others are destined to follow. So PM is about finding this out. Thus, performance evaluation may
be ethically sustainable as a concept but without implementing it keeping the equality of
opportunity and justice in mind, it will still not be ethical. If these are not ensured, PM becomes
an unreliable measurement of personal worth and job performance and hence suffers when
valued in the light of ethics. Conversely speaking, PM can also be seen as a valid way to justly
distribute rewards and punishment.

 Role of ethics in PM.

Ethics are directly linked to fairness. The ground rules emphasise that the other person’s
interests should count as much as the individual himself. The role of ethics in PM is to ensure
this.
Responsibility is more an individual phenomenon than a collective one and hence the
organisation mandates that the individuals are responsible to themselves so that PM operates
smoothly. Ethics in PM thus has the role of specifying the individual’s responsibility in ensuring
ethics in PM in clear terms.
The activities that the organisation and people in it perform have a purpose. This purpose
connects the organisation to its external environment.
There exists a clear vision and picture of reliability throughout the organisation. The vision is
generally owned and put into practice by the top management. The reward systems are aligned
with this vision and reward is decided through PM. Hence, ethics in PM has a role to ensure that
organisational visions are achieved