You are on page 1of 10

2nd Assignment of

Compensation Management

Developing a Performance Appraisal System

Semester: Autumn, 2011
Presented to:


Presented By:


Performance Appraisal The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is, says Dulewicz (1989), "... a basic human tendency to make judgements about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate. Modern Appraisal Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-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.

In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.) Whether this is an appropriate use of performance appraisal - the assignment and justification of rewards and penalties - is a very uncertain and contentious matter. Simply we can say that, One of the most important aspects of the employment process is called performance management or development (commonly called performance appraisal). The purpose of this process is to ensure that an organization is able to provide high quality service to meet the service needs of the customers. This is achieved by promoting employee competence and development. It should ensure that all new employees are competent to perform the basic responsibilities of the job, held accountable for job expectations and that all current employees continue to learn new information and develop new skills. While many people view the performance appraisal process as beginning after 6 or 12 months of employment and view it as a review of how the employee has performed for the previous period, a successful performance management process begins during the hiring process. It continues as an ongoing cycle from recruitment, through hiring,

orientation, and goal setting and on to performance appraisal and evaluation. This process occurs in three stages with the following components.

The performance management process starts with employee planning and ends with an evaluation of employee progress. Managers and employees should meet to discuss planning and goals throughout the year. If possible, formally sitting down with your supervisor or manager on a quarterly basis is optimal. The process, at its best, is a collaborative one, which should add value for both the employee and the employer.

It is unreasonable for a prospective employee to understand all of the requirements and duties of a position before they are hired. The process to set goals and evaluate performance should be discussed during the hiring process. Once you have accepted a position, the initial few months of employment should focus on orientation, training and competence assessment. During orientation, development goals for the coming year should be mutually discussed and documented. Expectations for the coming year should also be clearly defined by your supervisor. It is not unreasonable to expect that on a regular basis, your progress should be reviewed. It is recommend that you take the initiative to ask how you are doing, if there are areas on which you should be concentrating on or that need improvement, or if there are additional content areas for you to learn.

The annual performance appraisal is usually done in two steps. First, you and your manager complete the performance appraisal form - you doing a self-assessment. Often organizations also use a 60-degree feedback process, asking for input from your peers. Secondly, you and your manager participate in a formal performance appraisal interview. The appraisal form, used in the first step, consists of performance standards and criteria that are used to judge evaluate your performance. The items comprising your job description are usually the performance standards that are used in your annual appraisal. Most clinical laboratories use a criterion-based job description. The performance standards are derived from a job analysis, which is a detailed list of all of the skills involved in performing a task. For example, what are the skills necessary to perform a complete blood count? The criteria are used to determine the level of performance, which can be excellent, average, or poor (or alternatively meets, exceeds or does not meet standards). Once your appraisal is complete, your score is averaged and your merit raise (if applicable) is determined from the final score

If the above process occurs, the formal, annual performance appraisal process should be more of a formality. There should be no surprises at this session. If ongoing performance review has occurred, this session can concentrate on a thorough review of your overall performance, but more importantly can concentrate on setting goals for the coming year. Those should include specific areas of improvement, project goals, and specific learning's that should take place as you move forward. The components of an effective process are: GOALS: Along with your supervisor, you should establish key goals on a regular basis. A few points to keep in mind are: Make sure the goals are few in number (3-5) so that you can focus on them. Some of these will be in common with other employees and others will be specific to you.

Goals should match your personal development goals and be aligned with the Goals should be clear, precise, measurable and time-specific Goals should be within your control to achieve but also allow you to "stretch".

overall goals of the department.

ONGOING LEARNING: To support your goals, learning that will be required to achieve these goals should be defined and should provide continual development and growth. Focus on knowledge and skills you will need to be effective now and in the future, that will contribute to your achievement of goals, and are relevant to the your needs and interests.

COMPETENCIES: For every employee expected competencies should be defined. They fall into three categories. Those that apply to all employees and are important for the organization to remain successful. These may be things like customer service and employee satisfaction or engagement. Those that are the "core" of your job description and reflect those competencies necessary for you to be successful as a laboratory professional. Those that identify new knowledge, skills or abilities that you must learn to remain competent in your job for the upcoming defined time period. They may evolve around new instrumentation, process improvement or high-risk functions and regulatory changes.

Practical Study Of The Organization with respect to the topic

Jawa communication Jawa communication is a franchiser of Mobilink GSM (a subsidiary of Orascom Telecom), there are 29 employees in it in which One Director (Tanveer Ahmed Jawa). Two Managers (Jawad, Fahad Arif). Four Supervisors. One Accountant (Sajjad Ali). One Sales Manager (Abdul Haq). Twenty Workers/ Labors/ Operators. Position of Employees at Jawa Communication

Profile of Organization
Name: Jawa Communication. Address: 215 Railway Road Raiwind District LHR Phone# 042-5393800 Fax# 042-5393903 Mobile# 0300-8488215 E-mail address: Mobilink conducts performance appraisal in order to evaluate their employees current performance or past performance relative to companys performance standards. Mobilink try to adapt the performance appraisal in which their employees understood what his or her performance standards were and that the supervisor also provides the employee with feed back, development, and incentives required to help the person eliminate performance deficiencies or to continue to perform above par. There are many performance appraisal methods. Mobilink uses the computerized performance appraisal method. In Mobilink the performance appraisal of employees is conducted in December. The Mobilink HR department has developed performance appraisal sheet and has downloaded it on the intranet of Mobilink so that the supervisor performs the evaluation of the employees. When the supervisor completes the evaluation, he will send the performance appraisal sheet to the employee for the affirmation with the ideas of the supervisor if the employee does not agree with the supervisor he will not sign the PA sheet. When the last date of submission of PA sheet is passed then the HR department asks the supervisor and the employee about the problem and resolves the problem. Critical Review on Performance Appraisal: Online 360 degree approach of performance appraisal is adopted at Mobilink for evaluating employee performance. In the past only180 Degree approach for performance appraisal was adopted but now 360 Degree is also in action. This is a very supportive strategy by the organization because if an employee is not happy with the evaluation by his supervisor then he has the authority to challenge. There are a number of rewards that are tied to performance appraisals. So, tool applied for performance appraisal justifies itself.

By the complete and overall study of Jawa Communication (franchiser of Mobilink GSM) conclude that Performance appraisal system plays a very important role for enhancing the work activities Performance appraisal system shows how an organization can get benefits in this regard

Head Office
42 Kulsum Plaza, Blue Area, Islamabad. Tel# 051- 2273984 - 9 Fax# 051- 2824058 Email: Web:

Benefits/ Merits
It is clear that with the help of Performance appraisal system any organization can be success as Mobilink. There are so many benefits, which can be easily achieved. By setting of goals and their advanced planning/ strategies in Performance appraisal system they are succeed. Mobilink has a wide range of its services and providing coverage. They use their services packages according to the demand of customers. The organization is using 100% digital GSM technology.

The organization is not solving customers problems on the spot. They have large number of customers but not satisfied. The organization fail in providing the good quality of its services. The disconnecting during a call is most common problem for this organization. They have only two accountants; have no update information about the accounting.

They should manage their Performance appraisal system in such a way that, it could be helpful for top management to lower management. The company must check their business activities data carefully, which will be very helpful for their management and decision makers. The present situation of Performance appraisal system is much better but not best. It should be best because of the largest cellular company in Pakistan. They should upgrade Performance appraisal system for success.

Performance appraisal system plays a very important role for employees as well as for employer. Performance appraisal system shows how an organization can get benefits in recording, process, and communication and for decision-making. Performance appraisal system is much better in Mobilink but not very good. Performance appraisal system can enhance effectiveness in term of satisfied customers.

(:::- end of assignment -:::)