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Coal India Limited (CIL) (BSE: 533278, NSE: COALINDIA) is an Indian state-controlled coal mining company headquartered in Kolkata,

West Bengal, India and the world's largest coal miner with revenue exceeding 602.45 billion (FY2010-11).[2][3] It was formerly owned entirely by the Union Government of India, under the administrative control of the Ministry of Coal. It is involved in coal mining and production industry. In April 2011, CIL was conferred the Maharatna status by the Union Government of India [4] and ranked as one of India's most valuable company by market value. In 2010, CIL's initial public offering (IPO) got subscribed 15.28 times, collecting a record over 2.4 trillionthe highest IPO subscription so far.[5] On the first day of its listing on the Sensex, its stock closed 40% higher than IPO price.[6] It is India's largest ever public offer from Coal India Ltd. to raise up to 15,000 crore (US$2.99 billion).[7] It is currently 90% owned by the Government of India with the remaining 10% owned by the public.
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Coal India Limited was formed in 1973 as Coal Mines Authority Limited. In 1975 it was changed to Coal India Limited as a holding company with five subsidiaries: Bharat Coking Coal Limited (BCCL)(Dhanbad, Jharkhand) Central Coalfields Limited (CCL)(Ranchi, Jharkhand) Western Coalfields Limited (WCL)(Nagpur region) Eastern Coalfields Limited (ECL)(Sanctoria, Asansol, West Bengal) Central Mine Planning and Design Institute Limited (CMPDIL)(Ranchi, Jharkhand)

In 1985 two more subsidiaries were added: South Eastern Coalfields Limited (SECL)(Bilaspur) Northern Coalfields Limited, Singrauli (NCL,Singrauli) In 1992 one more subsidiary added: Mahanadi Coalfields Limited (MCL) (Sambalpur) One International Subsidiary Coal India Africana Limitada (CIAL) (Mozambique) Two indirect subsidiaries (held through our subsidiary, Mahanadi Coalfields Limited) MJSJ Coal Limited MNH Shakti Limited The Indian Institute of Coal Management (IICM) at Ranchi operates under Coal India Limited and imparts multi disciplinary management development programs executives. In April 2012, S Narsing Rao is expected to take over as the Coal India Chief.[1] [8]

Reviving of abandoned mines


Coal India Ltd (CIL), will extract coal from 18 abandoned underground mines owned by three of its subsidiaries in partnership with private players. Underground mining would be revived in 6 abandoned mines of Eastern Coalfields, 8 mines of Bharat Coking Coal, and 4 mines of Central Coalfields. These 18 mines have an approximate reserve of 1.647 billion tons of coal.[9] CIL contributes around 85% of coal production in India. It is the largest company in the world in terms of coal production. It employs nearly 397,000 person and is the largest corporate employer in the country. It is one of the largest companies in the country, with turnover being around 386.31 billion in 2007-08. It is one of the largest tax payer (Corporate Tax 35.75 billion (US$713.21 million)) in 2007-08 and has paid Dividend of 17.054 billion (US$340.23 million) to the Govt. of India in 2007-08. Traded as BSE: 533278

NSE: COALINDIA BSE SENSEX Constituent Industry Mining Founded 1975 Headquarters Kolkata,West Bengal, India Area served India Key people Zohra Chatterji(Chairman & MD) Products Coal, Bituminus Revenue 602.45 billion (US$12.02 billion) (2010-11) Profit 108.67 billion (US$2.17 billion) (2010-11) Employees 383,347 (April 2011)
Central Coalfields Limited (CCL) is a subsidiary of Coal India Limited (CIL), an undertaking of the Government of India. CCL manages the nationalized coal mines of the Coal Mines Authority, Central division. The registered and corporate office is at Darbhanga House, Ranchi, Jharkhand.

It presently has 63 mines (26 underground, 37 open cast) in areas of East Bokaro, West Bokaro, North Karanpur, South Karanpur, Ramgarh and Giridih. Their facilities include seven coal preparation plants, three for non-coking coal and four for medium coking coal. They earned their Mini Ratna status in 2007 Industry Coal Founded 1st November 1975 Headquarters Ranchi, Jharkhand Key people Ranjan Kumar Saha, CMD Products net_income = INR 965.79 Crore (2010) Employees 53,286 (31.07.2010) Performance Appraisal Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees.

Objectives Of Performance appraisal:


To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.

Process of Performance Appraisal

ESTABLISHING PERFORMANCE STANDARDS The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards. COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance. DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance

of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

Pre-requisites for Effective & Successful Performance Appraisal


The essentials of an effective performance system are as follows: Documentation means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. Standards / Goals the standards set should be clear, easy to understand, achievable, motivating, time bound and measurable. Practical and simple format - The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information. Evaluation technique An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employee. Communication Communication is an indispensable part of the Performance appraisal process. The desired behavior or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. Feedback The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees future performance. Personal Bias Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively.

Challenges Of Performance Appraisal


An organization comes across various problems and challenges Of Performance Appraisal in order to make a performance appraisal system effective and successful. The main Performance Appraisal challenges involved in the performance appraisal process are: Determining the evaluation criteria Identification of the appraisal criteria is one of the biggest problems faced by the top

management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms Create a rating instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of competence Top management should choose the raters or the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively. Errors in rating and evaluation Many errors based on the personal bias like stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all other traits) etc. may creep in the appraisal process. Therefore the rater should exercise objectivity and fairness in evaluating and rating the performance of the employees. Resistance The appraisal process may face resistance from the employees and the trade unions for the fear of negative ratings. Therefore, the employees should be communicated and clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her.

Challenges Of Performance Appraisal


Performance Appraisal is being practiced in 90% of the organisations worldwide. Self-appraisal and potential appraisal also form a part of the performance appraisal processes. Typically, Performance Appraisal is aimed at: To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future. Provide information to assist in the HR decisions like promotions, transfers etc. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees. Helps to strengthen the relationship and communication between superior subordinates and management employees.

According to a recent survey, the percentage of organisations (out of the total organisations surveyed i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:

The most significant reasons of using Performance appraisal are: Making payroll and compensation decisions 80% Training and development needs 71% Identifying the gaps in desired and actual performance and its cause 76% Deciding future goals and course of action 42% Promotions, demotions and transfers 49% Other purposes 6% (including job analysis and providing superior support, assistance and counseling)

Challenges Of Performance Appraisal


Performance appraisal is a part of career development. The latest mantra being followed by organizations across the world being "get paid according to what you contribute" the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. Performance appraisal as Career Development leads to the recognition of the work done by the employees, many a times by the means of rewards and appreciation etc. It plays the role of the link between the organization and the employees personal career goals. Potential appraisal, a part of Performance appraisal, helps to identify the hidden talents and potential of the individuals. Identifying these potential talents can help in preparing the individuals for higher responsibilities and positions in the future. The performance appraisal process in itself is

developmental in nature. Performance appraisal is also closely linked to other HR processes like helps to identify the training and development needs, promotions, demotions, changes in the compensation etc. A feedback communicated in a positive manner goes a long way to motivate the employees and helps to identify individual career developmental plans. Based on the evaluation, employees can develop their career goals, achieve new levels of competencies and chart their career progression. Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.

Approaches to Performance Development


Performance appraisal - Traditional approach Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees. This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development needs or career developmental possibilities. The primary concern of the traditional approach is to judge the performance of the organization as a whole by the past performances of its employees Therefore, this approach is also called as the overall approach. In 1950s the performance appraisal was recognized as a complete system in itself and the Modern Approach to performance appraisal was developed. Performance appraisal - Modern approach The modern approach to performance development has made the performance appraisal process more formal and structured. Now, the performance appraisal is taken as a tool to identify better performing employees from others, employees training needs, career development paths, rewards and bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern approach to performance appraisals includes a feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization. The modern approach to Performance appraisal is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development.

FAQs About Performance Appraisal Program


Q. What is the purpose of performance appraisals? A. Performance appraisals help to strategically review the performance of the employees, their strengths, weaknesses and accomplishments during the year. Performance appraisal allows deciding the goals, objectives and the desired performance standards for the employee for the upcoming year. Q. How should the self appraisal be used? A. Self appraisal or self evaluation is the review of the performance by the employee himself. The self evaluation should be discussed with the employee and if appropriate, should be incorporated in the final rating. Q. Is there any comprehensive formula to calculate the overall rating? A. No, there is no comprehensive formula for doing so. The overall rating should be based on a number of factors like the extent of goals achieved, the overall performance of the employee, his competencies etc. Q. How should the ratings be given if there has been a change of supervisor or manager during the period of the appraisal? A. To complete the Performance appraisal subjectively and fairly, it is advised to consult the previous supervisor or manager. If this is not possible, consult the supervisors superior to get his views and inputs. Q. How can input/feedback be collected for the appraisal process? A. different input forms can be used for taking the feedback from the various sources like the superior, peers, customers, vendors and the employee himself. All the perspectives thus received should be combined in the appropriate manner and to get an overall, complete view of the employees performance. Observation can also be exercised by the superior to obtain information. Q. What if the employee refuses to agree or/and accept the review? A. First of all, ensure that the employee has got a chance to review his completed appraisal form. If the employee refuses to accept his appraisal, try to sort out the problem by discussing his reasons of dissatisfaction with him calmly. If the employee refuses to co-operate, then pass the documents to the HR department with a note on it that the employee has refused to accept and let them take the necessary action. Q. How do you deal with an average or a non-performer? Provide constructive feedback and try to motivate the employee. Keep the focus on the performance, not the personality of the employee. Provide training and development opportunities to the employee Discuss and take the employees inputs on how to solve the problem. Plan the course of action and standards in agreement with the employee.

If no improvement takes place, inform the human resources or your superior about the problem. Q. Should the review be confidential? A. The Individual performance reviews should be kept confidential and should not be accessible to other employees. They should also be stored at a safe place with limited access. Outdated reviews should be destroyed. The appraisal can also be kept as a part of the HR records of the employee.

Techniques Of Performance Appraisal


The various methods and techniques used for Performance appraisal can be categorized as the following traditional and modern methods:

Performance appraisal
A performance appraisal (PA) or performance evaluation[1] is a systematic and periodic process that assesses an individual employees job performance and productivity in relation to certain preestablished criteria and organizational objectives.[2][3] Other aspects of individual employees are considered as well, such as organizational citizenship behavior,[4] accomplishments, potential for future improvement, strengths and weaknesses, etc. [2][5] To collect PA data, there are three main methods: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods.[1] A PA is typically conducted annually.[6] The interview could function as providing feedback to employees, counseling and developing employees, and conveying and discussing compensation, job status, or disciplinary decisions.[6] PA is often included in performance management systems. Performance management systems are employed to manage and align" all of an organization's resources in order to achieve highest possible performance.[1] How performance is managed in an organization determines to a large extent the success or failure of the organization. Therefore, improving PA for everyone should be among the highest priorities of contemporary organizations.[7] Some applications of PA are performance improvement, promotions, termination, test validation, and more.[8] While there many potential benefits of PA, there are also some potential drawbacks. For example, PA can help facilitate management-employee communication; however, PA may result in legal issues if not executed appropriately[9][1] as many employees tend to be unsatisfied with the PA process.[10] PAs created in and determined as useful in the United States are not necessarily able to be transferable cross-culturally.[11]

Applications of Performance Appraisal Results


A central reason for the utilization of performance appraisals (PAs) is performance improvement (initially at the level of the individual employee, and ultimately at the level of the organization).[8] Other fundamental reasons include as a basis for employment decisions (e.g. promotions, terminations, transfers), as criteria in research (e.g. test validation), to aid with communication (e.g. allowing employees to know how they are doing and organizational expectations), to establish personal objectives for training programs, for transmission of objective feedback for personal development, as a means of documentation to aid in keeping track of decisions and legal requirements[8] and in wage and salary administration.[1] Additionally, PAs can aid in the formulation of job criteria and selection of individuals who are best suited to perform the required organizational tasks.[2] A PA can be part of guiding and monitoring employee career development. [12] PAs can also be used to aid in work motivation through the use of reward systems.[2]

Potential Benefits of Performance Appraisals


There are a number of potential benefits of organizational performance management conducting formal performance appraisals (PAs). There has been a general consensus in the belief that PAs lead to positive implications of organizations.[13] Furthermore, PAs can benefit an organizations effectiveness.[12] One way is PAs can often lead to giving individual workers feedback about their job performance.[9] From this may spawn several potential benefits such as the individual workers becoming more productive.[14] Other potential benefits include: Facilitation of communication: communication in organizations is considered an essential function of worker motivation.[9] It has been proposed that feedback from PAs aid in minimizing employees perceptions of uncertainty.[12] Fundamentally, feedback and management-employee communication can serve as a guide in job performance.[9]

Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues may distract employees from their work, and trust issues may be among these distracting factors.[15] Such factors that consume psychological energy can lower job performance and cause workers to lose sight of organizational goals.[9] Properly constructed and utilized PAs have the ability to lower distracting factors and encourage trust within the organization.[16] Goal setting and desired performance reinforcement: organizations find it efficient to match individual workers goals and performance with organizational goals.[9] PAs provide room for discussion in the collaboration of these individual and organizational goals.[17] Collaboration can also be advantageous by resulting in employee acceptance and satisfaction of appraisal results.[18] Performance improvement: well constructed PAs can be valuable tools for communication with employees as pertaining to how their job performance stands with organizational expectations.[12] At the organizational level, numerous studies have reported positive relationships between human resource management (HRM) practices"[9] and performance improvement at both the individual and organizational levels. Determination of training needs: Employee training and development are crucial components in helping an organization achieve strategic initiatives.[9][19] It has been argued that for PAs to truly be effective, post-appraisal opportunities for training and development in problem areas, as determined by the appraisal, must be offered.[20] PAs can especially be instrumental for identifying training needs of new employees.[5] Finally, PAs can help in the establishment and supervision of employees career goals.[12]

Potential Complications of Performance Appraisals


Even with all the potential advantages of formal performance appraisals (PAs), there are still potential drawbacks as well. It has been noted that determining the relationship between individual job performance and organizational performance can be a difficult task.[19] Generally, there are two overarching problems from which several complications spawn. One of the problems with formal PAs is there can be detrimental effects to the organization(s) involved if the appraisals are not used appropriately. The second problem with formal PAs is they can be ineffective if the PA system does not correspond with the organizational culture and system.[9] Complications stemming from these issues are: Detrimental to quality improvement: it has been proposed that the use of PA systems in organizations adversely affect organizations pursuits of quality performance.[21] It is believed by some scholars and practitioners that the use of PAs is more than unnecessary if there is total quality management.[17] Negative perceptions: Quite often, individuals have negative perceptions of PAs.[13] Receiving and/or the anticipation of receiving a PA can be uncomfortable and distressful[12] and potentially cause tension between supervisors and subordinates.[14] Errors: PAs should provide accurate and relevant ratings of an employees performance as compared to pre-established criteria (i.e. organizational expectations).[22] Nevertheless, supervisors will sometimes rate employees more favorably than that of their true performance in order to please the employees and avoid conflict.[9] Inflated ratings are a common malady associated with formal" PA.[23] Legal issues: when PAs are not carried out appropriately, legal issues could result that place the organization at risk.[14] PAs are used in organizational disciplinary programs[12] as well as for promotional decisions within the organization.[9] The improper application and utilization of PAs can affect employees negatively and lead to legal action against the

organization. Performance goals: performance goals and PA systems are often used in association. Negative outcomes concerning the organizations can result when goals are overly challenging or overemphasized to the extent of effecting ethnics, legal requirements, or quality.[24] Moreover, challenging performance goals can impede on employees abilities to acquire necessary knowledge and skills.[15] Especially in the early stages of training, it would be more beneficial to instruct employees on outcome goals than on performance goals.[9] Derail merit pay or performance-based pay: some researchers contend that the deficit in merit pay and performance-based pay is linked to the fundamental issues stemming from PA systems.[20]

Who Conducts Performance Appraisals


Human Resource Management & Performance Management
Human resource management (HRM) conducts performance management. Performance management systems consist of the activities and/or processes embraced by an organization in anticipation of improving employee performance, and therefore, organizational performance.[25] Consequently, performance management is conducted at the organizational level and the individual level. At the organizational level, performance management oversees organizational performance and compares present performance with organizational performance goals.[20] The achievement of these organizational performance goals depends on the performance of the individual organizational members.[20] Therefore, measuring individual employee performance can prove to be a valuable performance management process for the purposes of HRM and for the organization.[20] Many researchers would argue that performance appraisal is one of the most important processes in Human Resource Management.[10] The performance management process begins with leadership within the organization creating a performance management policy.[20] Primarily, management governs performance by influencing employee performance input (e.g. training programs) and by providing feedback via output (i.e. performance assessment and appraisal).[26] The ultimate objective of a performance management process is to align individual performance with organizational performance.[27] A very common and central process of performance management systems is performance appraisal (PA).[20] The PA process should be able to inform employees about the organization's goals, priorities, and expectations and how well they are contributing to them.[27]

When Performance Appraisals are Conducted


Performance appraisals (PAs) are conducted at least annually,[20] and annual employee performance reviews appear to be the standard in most American organizations.[6] However, it has been acknowledged that appraisals conducted more frequently (more than once a year) may have positive implications for both the organization and employee.[9] It is suggested that regular performance feedback provided to employees may quell any unexpected and/or surprising feedback to year-end discussions.[10] In a recent research study concerning the timeliness of PAs, one of the respondents even suggested that the performance review should be done formally and more frequently, perhaps once a month, and recorded twice a year.[10] Other researchers propose that the purpose of PAs and the frequency of their feedback are contingent upon the nature of the job and characteristics of the employee.[28] For example, employees of routine jobs where performance maintenance is the goal would benefit sufficiently from annual PA feedback. On the other hand, employees of more discretionary and non-routine jobs, where goal-setting is

appropriate and there is room for development, would benefit from more frequent PA feedback.[28] [6]

Methods of Collecting Performance Appraisal Data


There are three main methods used to collect performance appraisal (PA) data: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods.[4]

Objective production
The objective production method consists of direct, but limited, measures such as sales figures, production numbers, the electronic performance monitoring of data entry workers, etc.[4] The measures used to appraise performance would depend on the job and its duties. Although these measures deal with unambiguous criteria, they are usually incomplete because of criterion contamination and criterion deficiency. Criterion contamination refers to the part of the actual criteria that is unrelated to the conceptual criteria.[4] In other words, the variability in performance can be due to factors outside of the employees control. Criterion deficiency refers to the part of the conceptual criteria that is not measured by the actual criteria.[4] In other words, the quantity of production does not necessarily indicate the quality of the products. Both types of criterion inadequacies result in reduced validity of the measure.[4] Regardless of the fact that objective production data is not a complete reflection upon job performance, such data is relevant to job performance. The Happy-Productive Worker Hypothesis The happy-productive worker hypothesis states that the happiest workers are the most productive performers, and the most productive performers are the happiest workers[29] Yet, after decades of research, the relationship between job satisfaction and job performance produces only a weak positive correlation. Published in 2001 by Psychological Bulletin, a meta-analysis of 312 research studies produced an uncorrected correlation of 0.18.[30] This correlation is much weaker than what the happy-productive worker hypothesis would predict. There is no clear relationship between job satisfaction and job performance.[29]

Personnel
The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents). Most organizations consider unexcused absences to be indicators of poor job performance, even with all other factors being equal;[29] however, this is subject to criterion deficiency. The quantity of an employees absences does not reflect how dedicated he/she may be to the job and its duties. Especially for blue-collar jobs, accidents can often be a useful indicator of poor job performance,[4] but this is also subject to criterion contamination because situational factors also contribute to accidents. Once again, both types of criterion inadequacies result in reduced validity of the measure. [4] Although excessive absenteeism and/or accidents often indicate poor job performance rather than good performance, such personnel data is not a comprehensive reflection of an employees performance.[4]

Judgmental Evaluation
Judgmental evaluation appears to be a collection of methods, and as such, could be considered a methodology. A common approach to obtaining PAs is by means of raters.[1] Because the raters are human, some error will always be present in the data. The most common types of error are leniency errors, central tendency errors, and errors resulting from the halo effect.[1] These errors arise

predominantly from social cognition and the theory in that how we judge and evaluate other individuals in various contexts is associated with how we acquire, process, and categorize information.[1] An essential piece of this method is rater training. Rater training is the process of educating raters to make more accurate assessments of performance, typically achieved by reducing the frequency of halo, leniency, and central-tendency errors.[1] Rater training also helps the raters develop a common frame of reference for evaluation of individual performance.[31] Many researchers and survey respondents support the ambition of effectual rater training.[10] However, it is noted that such training is expensive, time consuming, and only truly functional for behavioral assessments.[10] Another piece to keep in mind is the effects of rater motivation on judgmental evaluations. It is not uncommon for rating inflation to occur due to rater motivation (i.e. organizationally induced pressures that compel raters to evaluate ratees positively).[1] Typically, raters are motivated to give higher ratings because of the lack of organizational sanction concerning accurate/inaccurate appraisals, the rater's desire to guarantee promotions, salary increases, etc., the rater's inclination to avoid negative reactions from subordinates, and the observation that higher ratings of the ratees reflect favorably upon the rater.[1] The main methods used in judgmental performance appraisal are:[1] Graphic Rating Scale: graphic rating scales (see scale (social sciences)) are the most commonly used system in PA.[1] On several different factors, subordinates are judged on 'how much' of that factor or trait they possess. Typically, the raters use a 5- or 7-point scale; however, there are as many as 20-point scales.[1] Employee-Comparison Methods: rather than subordinates being judged against preestablished criteria, they are compared with one another. This method eliminates central tendency and leniency errors but still allows for halo effect errors to occur.[1] The rank-order method has raters ranking subordinates from best to worst, but how truly good or bad one is on a performance dimension would be unknown.[1] The paired-comparison method requires the rater to select the two "best" subordinates out of a group on each dimension then rank individuals according to the number of times each subordinate was selected as one of the "best".[1] The forced-distribution method is good for large groups of ratees. The raters evaluate each subordinate on one or more dimensions and then place (or force-fit, if you will) each subordinate in a 5 to 7 category normal distribution.[1] The method of top-grading can be applied to the forced distribution method.[32] This method identifies the 10% lowest performing subordinates, as according to the forced distribution, and dismisses them leaving the 90% higher performing subordinates. Behavioral Checklists and Scales: behaviors are more definite than traits. The critical incidents method (or critical incident technique) concerns specific behaviors indicative of good or bad job performance.[1] Supervisors record behaviors of what they judge to be job performance relevant, and they keep a running tally of good and bad behaviors. A discussion on performance may then follow. The behaviorally anchored rating scales (BARS) combine the critical incidents method with rating scale methods by rating performance on a scale but with the scale points being anchored by behavioral incidents.[1] Note that BARS are job specific. Peer and Self Assessments While most judgmental PA research is evaluated by a superior (e.g. supervisor, manager), peer assessments are evaluated by ones colleagues. With self-assessments, individuals evaluate themselves.[1] Peer Assessments: members of a group evaluate and appraise the performance of their fellow group members.[1] There are three common methods of peer assessments. Peer nomination involves each group member nominating who he/she believes to be the best on a certain

dimension of performance. Peer ratings has each group member rate each other on a set of performance dimensions. Peer ranking requires each group member rank all fellow members from best to worst on one or more dimensions of performance. Self-Assessments: for self-assessments, individuals assess and evaluate their own behavior and job performance.[1] It is common for a graphic rating scale to be used for selfassessments. Positive leniency tends to be a problem with self-assessments.[4] 360-Degree Feedback: 360-degree feedback is multiple evaluations of employees which often include assessments from superior(s), peers, and ones self.[1]

Organizational Citizenship Behavior


Also referred to as contextual behavior, prosocial behavior, and extra-role behavior, organizational citizenship behavior (OCB) consists of employee behavior that contributes to the welfare of the organization but is beyond the scope of the employees job duties.[4] These extra-role behaviors may help or hinder the attainment of organizational goals. Research supports five dimensions of OCB: altruism, conscientiousness, courtesy, sportsmanship, and civic virtue.[33] Researchers have found that the OCB dimensions of altruism and civic virtue can have just as much of an impact on managers subjective evaluations of employees performances as employees objective productivity levels.[34] The degree to which OCB can influence judgments of job performance is relatively high. Controversy exists as to whether OCB should be formally considered as a part of performance appraisal (PA).

Performance Appraisal Interviews


The performance appraisal (PA) interview is typically the final step of the appraisal process.[1] The interview is held between the subordinate and supervisor. The PA interview can be considered of great significance to an organizations PA system.[6] It is most advantageous when both the superior and subordinate participate in the interview discussion and establish goals together.[1] Three factors consistently contribute to effective PA interviews: the supervisors knowledge of the subordinates job and performance in it, the supervisors support of the subordinate, and a welcoming of the subordinates participation.[6]

Employee Reactions to Performance Appraisal


Numerous researchers have reported that many employees are not satisfied with their performance appraisal (PA) systems.[10] Studies have shown that subjectivity as well as appraiser bias is often a problem perceived by as many as half of employees.[10] Appraiser bias, however, appears to be perceived as more of a problem in government and public sector organizations.[10] Also, according to some studies, employees wished to see changes in the PA system by making the system more objective, improving the feedback process, and increasing the frequency of review.[10] In light of traditional PA operation defects, organizations are now increasingly incorporating practices that may improve the system. These changes are particularly concerned with areas such as elimination of subjectivity and bias, training of appraisers, improvement of the feedback process and the performance review discussion.[10] According to a meta-analysis of 27 field studies, general employee participation in his/her own appraisal process was positively correlated with employee reactions to the PA system.[18] More specifically, employee participation in the appraisal process was most strongly related to employee satisfaction with the PA system.[18] Concerning the reliability of employee reaction measures, researchers have found employee reaction scales to be sound with few concerns through using a confirmatory factor analysis that is representative of employee reaction scales.[35]

Researchers suggest that the study of employees reactions to PA is important because of two main reasons: employee reactions symbolizes a criterion of interest to practitioners of PAs and employee reactions have been associated through theory to determinants of appraisal acceptance and success. [35] Researchers translate these reasons into the context of the scientist-practitioner gap or the lack of alignment between research and practice.[35]

Performance Appraisal and Legal Implications


There are federal laws addressing fair employment practices, and this also concerns performance appraisal (PA). Discrimination can occur within predictions of performance and evaluations of job behaviors.[1] The revision of many court cases has revealed the involvement of alleged discrimination which was often linked to the assessment of the employees job performance.[36] Some of the laws which protect individuals against discrimination are the Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA).[1] Lawsuits may also results from charges of an employers negligence, defamation, and/or misrepresentation.[1] A few appraisal criteria to keep in mind for a legally sound PA is to keep the content of the appraisal objective, job-related, behavior-based, within the control of the ratee, and related to specific functions rather than a global assessment.[36] Some appraisal procedure suggestions for a legally sound PA is to standardize operations, communicate formally with employees, provide information of performance deficits and give opportunities to employees to correct those deficits, give employees access to appraisal results, provide written instructions for the training of raters, and use multiple, diverse and unbiased raters.[36] These are valuable but not exhaustive lists of recommendations for PAs.

Cross-Cultural Implications of Performance Appraisal


Performance appraisal (PA) systems, and the premises of which they were based, that have been formed and regarded as effective in the United States may not have the transferability for effectual utilization in other countries or cultures, and vice versa.[11] Performance appraisal is thought to be deeply rooted in the norms, values, and beliefs of a society.[37] Appraisal reflects attitudes towards motivation and performance (self) and relationships (e.g. peers, subordinates, supervisors, organization), all of which vary from one country to the next.[38] Therefore, appraisal should be in conjunction with cultural norms, values, and beliefs in order to be operative.[39] The deep-seated norms, values and beliefs in different cultures affect employee motivation and perception of organizational equity and justice. In effect, a PA system created and considered effectual in one country may not be an appropriate assessment in another cultural region.[38] For example, some countries and cultures value the trait of assertiveness and personal accomplishment while others instead place more merit on cooperation and interpersonal connection. Countries scoring high on assertiveness consider PA to be a way of assuring equity among employees so that higher performing employees receive greater rewards or higher salaries.[38] Countries scoring low on assertiveness but higher in interpersonal relations may not like the social separation and pay inequity of higher/lower performing employees; employees from this more cooperative rather than individualistic culture place more concern on interpersonal relationships with other employees rather than on individual interests.[38] High assertive countries value performance feedback for selfmanagement and effectiveness purposes while countries low in assertiveness view performance feedback as threatening and obtrusive.[40][38] In this case, the PA of the high assertive countries would likely not be beneficial for countries scoring lower in assertiveness to employ. However, countries scoring lower in assertiveness could employ PA for purposes of improving long-term communication development within the organization such as clarifying job objectives, guide training and development plans, and lessen the gap between job performance and organizational expectations. [41]