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CHAPTER 1. EXECUTIVE SUMMARY 2. INTRODUCTION DESCRIPTION PAGE NOS.
3. RESARCH METHODOLOGY
4. COMPANY PROFILE
5. DATA ANALYSIS & INTERPRETATION
7. SUGGESTIONS AND CONCLUSIONS
The performance appraisal system ideally is an organization designed programmed involving both the organization and the personnel to improve the capability of both. The elements of performance management include: purpose, content, method, appraiser, frequency, and feedback. The appraisal process involves determining and communicating to an employee how he or she is performing the job and establishing a plan of improvement. The information provided by performance appraisal is useful in three major areas: compensation, placement, and training and development. Appraisal helps to improve performance by identifying the strengths and weaknesses; it helps to identify those with a potential for greater responsibility; and assists in deciding on an equitable compensation system. The methods of performance appraisal include rating scale, critical incident, ranking methods, and management by objectives. Several common errors have been identified in performance appraisal. Leniency occurs when ratings are grouped at the positive 7end instead of being spread throughout the performance scale. The central tendency occurs when all or most employees are ranked in the middle of the rating scale. The halo effect occurs when a manager allows his or her general impression of an employee to influence judgment of each separate item in the performance appraisal. A sound appraisal system involves assessing employee performance on a regular basis. Performance appraisal can be done by superiors who rate subordinates, subordinates who rate their superiors, and self-appraisal. A suitable performance appraisal system has to be designed keeping in view the culture and requirements of an organization.
Performance appraisal is a systematic evaluation of present potential capabilities of personnel and employees by their superiors, superior’s superior or a professional from outside. It is a process of estimating or judging the value, excellent qualities or status of a person or thing. It is a process of collecting, analyzing, and evaluating data relative to job behavior and results of individuals. The appraisal system is organized on the principle of goals and management by objectives. Management decisions on performance utilize several integrated inputs: goals and plans, job evaluation, performance evaluation, and individual history. It connotes a twodimensional concept - at one end of the continuum lies the goals set by the authority, and at the other end, the performance achieved by the individual or any given group. Performance appraisal can be either formal or informal. Usage of former systems schedule regular sessions in which to discuss an employee’s performance. Informal appraisals are unplanned, often just chance statements made in passing about an employee’s performance. Most organizations use a formal appraisal system. Some organizations use more than one appraisal system for different types of employees or for different appraisal purposes. Organizations need to measure employee performance to determine whether acceptable standards of performance are being maintained. The six primary criteria on which the value of performance may be assessed are: quality, quantity, time lineness, cost effectiveness, need for supervision, and interpersonal impact. If appraisals indicate that employees are not performing at acceptable levels, steps can be taken to simplify jobs, train, and motivate workers, or dismiss them, depending upon the reasons for poor performance. The results of appraisal are normally used to: (1) estimate the overall effectiveness of employees in performing their jobs, (2) identify strengths and weaknesses in job knowledge and skills, (3)determine whether a subordinate’s responsibilities can be expanded, (4) identify future training and development needs, (5) review progress toward goals and objectives, (6) determine readiness for promotion, and (7) motivate and guide growth and development.
compared with required standards of performance. To generate adequate feedback and guidance from the immediate superior to an employee working under him. for example. with the identification of employees’ training and development needs. According to Cummings and Schwab (1973). To help the employee to overcome his weaknesses and improve his strengths so as to enable him to achieve the desired _performance. and valid _information about employees. suggests needed changes in one’s behavior. transfers. or job knowledge. To help in creating a desirable culture and tradition in the organization. promotions. It is increasingly viewed as central to good human resource management. and uses it as a base for coaching and counseling the individual by his superior. relevant. To contribute to the growth and development of an employee through helping him in realistic goal setting. free. 5. 4. and the setting of new targets. attitudes. the performance appraisal of an organization provides systematic judgments to backup wage and salary administration. demotions or _terminations) and salary administration. To generate significant.OBJECTIVES OF PERFORMANCE APPRAISAL Performance appraisal plans are designed to meet the needs of the organization and the individual. skills. training and developing them. To provide inputs to system of rewards (comprising salary increments. 3. The developmental performance appraisal is concerned. thus. useful for compensation. . To help the organization to identify employees for the purpose of motivating. placement. This is highlighted in Cumming’s classification of performance appraisal objectives. 7. the objectives of performance appraisal schemes can be categorized as either evaluative or developmental. 2. Appraising employee performance is. The evaluative purpose have a historical dimension and are concerned primarily with looking back at how employees have actually performed over a given time period. The broad objectives of performance appraisal are: 1. 6. In short. and training and development purposes.
and programmed assessment. and establishing a data bank on appraisal for rendering assistance in personnel decisions. The intent of such appraisals is to guide and motivate employees to improve their performance and potential for advancement in the organization.USES OF PERFORMANCE APPRAISAL The appraisal systems do not operate in isolation. demotions. Determining promotions or transfers depending on the demonstration of employee strengths and weaknesses. terminations and transfers. they generate data that can contribute to other HRM systems . Programme assessment requires the collection and storage of performance appraisal data for a number of uses. An employee’s performance is often evaluated relative to other employees for administrative purposes. selection. Performance measures can be used to validate selection procedures and can also be used as “before” and “after” measures to determine the success of training and development programmers. Some of the common uses of appraisals include: Determining appropriate salary increases and bonuses for workers based on performance measure. In brief. the various uses of performance appraisal can be classified into two broad categories. One .for example to succession planning and manpower planning. Programme appraisal commonly serve an administrative purpose by providing employers with a rationale for making many personnel decisions. Valid performance appraisal data are essential to demonstrate that decisions are based on job related performance criteria. such as decisions relating to pay increases. Determining training needs and evaluation techniques by identifying areas of weaknesses. Appraisal data can also be used for employee development purposes in helping to identify specific training needs of individuals. but may be assessed in relation to an absolute standard of performance. Performance appraisal for employee development purposes provides feedback on an employee’s performance. The records can show how effective recruiting. and placement have been in supplying a qualified workforce. promotions. Organizations use performance appraisals for three purposes: administrative. Promoting effective communication within organizations through the interchange of dialogue between supervisors and subordinates. Motivating employees by showing them where they stand. employee development.
After the appraisal 1. Personality-based systems: In such systems the appraisal form consists of a list of personality traits that presumably are significant in the jobs of the individuals being appraised. a formal appraisal interview is a good time to find out how employees think they are performing on the job. they differ in the type of descriptive term used. The planning appraisal strategy has to be done: Before the appraisal 1. 2. 4. Generalized descriptive systems: Similar to personality-based systems. For a manager. ingenuity. Establish key task areas and performance goals. Monitor performance. coaching. loyalty and trustworthiness appear on most such lists. and for selection test validation. For employees. Think about how you can help the employee to achieve more at work. creativity. discharges. 2. intelligence. Such traits as initiative. PLANNING THE APPRAISAL A meaningful performance appraisal is a two-way process that benefits both the employee and the manager. End the interview on an upbeat note. The other main use is for employee development including performance improvement training. During the appraisal 1 Encourage two-way communication. 4. Get the facts. Record notes of the interview. 3. 3. Schedule each appraisal interview well in advance. transfers. 5. Discuss and agree on performance goals for the future. drive. Often they include qualities or actions of presumably good managers: . 2. promotions.category concerns the obtaining of evaluation data on employees for decision-making for various personnel actions such as pay increases. APPROACHES TO PERFORMANCE APPRAISAL George Odiorne has identified four basic approaches to performance appraisal. Set performance goals for each key task area. appraisal is the time to find out how the manager thinks they are performing in the job. Prepare a formal record of the interview. and counseling.
Key Performance Areas (KPAs) / Key Result Areas (KRAs) 2. Results-centered systems: These appraisal systems (sometime called work-centered or jobcentered systems) are directly job related. number of items processed.“organizes. Such a system. controls. number of customers? What targets or standards of performance have been assigned for your job? Are there any other ways in which it would be possible to measure the effectiveness with which you carry out your job? Is there any other information you can provide about your job? COMPONENTS OF PERFORMANCE APPRAISAL The components that should be used in a performance appraisal system flow directly from the specific objectives of appraisal. plans. Tasks/targets/objectives. Self appraisal 4. makes things happen. might be useful if meticulous care were taken to define the meaning of each term in respect to actual results. They require that manager and subordinate sit down at the start of each work evaluation period and determine the work to be done in all areas of responsibility and functions.” and so on. motivates others. communicates. number of people managed. attributes/qualities/traits 3. delegates. 1. Performance analysis . like the personality-based system. A typical questionnaire addressed to an individual would cover the following points: What is your job title? To whom are you responsible? Who is responsible to you? What is the main purpose of your job? To achieve that purpose what are your main areas of responsibility? What is the size of your job in such terms of output or sales targets. The following components are being used in a number of Indian organizations. Behavioral descriptive systems: Such systems feature detailed job analysis and job descriptions. When introducing performance appraisal a job description in the form of a questionnaire has to be preferred. including specific statements of the actual behavior required from successful employees. and the specific standards of performance to be used in each area.
. therefore. where the appraises have the opportunity of discussing with their superiors during the evaluation exercise. the concerned individual is informed about the same. discussion or counseling 7. In the close ended appraisal system. Potential appraisal. where the appraises do not get any chance to know or see how they have been evaluated. or it can be completely open. and he is ranked in a five or ten point rating scale. a confidential report is submitted on the performance of the employee. The main weakness of this system is that all the employees are ranked in a particular scale. Another weakness of the grading system is that the appraisal may turn out to be more subjective in nature due to insufficient data maintained on the individual. therefore. commonly used in government organizations and public enterprises. open ended appraisal system. there is no concerted effort to motivate the average performers in performing better.5. in a constant dilemma as to how their performance is viewed by the management. The company uses this tool primarily for rewarding a good performer or for other considerations like promotions. This system also leads to unnecessary comparisons made on different individuals performing similar jobs. unlike in the close ended system. Performance appraisal can be a closed affair. Performance review. Performance ratings 6. Only where an adverse assessment is made against an individual. TYPES OF PERFORMANCE APPRAISAL There are two types of performance appraisal systems which are normally used in organizations: close ended appraisal system. Assessment / review by reviewing authority 10. is not given an opportunity to respond to the assessment made on him/her. and whereas the good performers are rewarded. In the open ended appraisal system. Ratings / assessment by appraiser 9. Identification of training / development needs 8. The employees are. the performance of the individual is discussed with him. The main shortcoming of this system is that an individual is not informed about his/her inherent strengths and weaknesses and.
Care should be taken to take into confidence the representatives of the union. Attempt is to be made to provide intensive training to all the supervisors with a view to obtaining unbiased and uniform appraisal of their subordinates. 4. Pigors and Myers suggest several steps to develop and administer the programme effectively. Indeed. in this context. The personnel department may attempt to obtain as much as possible the agreement of line management in respect of the needs and objective of the programme. The personnel or industrial relations manager tends to explain the purpose and nature of the programme to all the superiors and subordinates to be involved and affected by it. attempts may be made to recommend for salary increases or promotion. 8. 6. the appraisal programme is likely to be an utter failure if it lacks the support of top management. and description or instructions to be indicated on the form. indicate difficulties. The personnel department has to examine the plans of other organizations as well as the relevant literature in the field to formulate the most suitable plan for the appraisal programme. 7. if he feels that the appraisal has been biased and that it should be otherwise. weights and points to be given to each factor. if it exists in the company. and if the appraisal is not used to serve the purposes it is meant. 3. and encourage improved performance. A choice has to be made among different kinds of appraisal methods judiciously. 5. if the results of appraisal are not discussed with the subordinates. or have no trust in its value. 1. 2. As soon as the appraisal has been duly discussed. the discussion should be in the form of a progress review and every opportunity should be given to the subordinate to express himself.STEPS IN THE APPRAISAL PROGRAMME As in other personnel programmes. Attempts should be made to obtain the co-operation of supervisors in devising the appraisal form and discuss with them the different factors to be incorporated. Care may be taken to acquire line and staff co-ordination and mutual checking of appraisals with a view to achieving intra and inter-departmental consistency and uniformity. There should be an arrangement for periodic discussion of the appraisal by the superior with each of the subordinates where attempts may be made to stress good points. . Explicitly. if these decisions seem plausible in the light of appraisals. if superiors are not adequately trained. performance appraisal forms a line responsibility to be accomplished with advice and help of the personnel department.
if the employees or their union representatives are dissatisfied with the personnel decisions which the management has taken on the basis of these appraisals. it is possible to identify areas in which the individual requires further development.Other criticisms of traditional performance rating relates to: First. creativity. job knowledge. and the impact of an individual’s job. if any. the halo effect. differing perceptions. The merit-rating scales are frequently criticised from the standpoints of clarity in standards. dependability. there may be divergent perceptions and accordingly. excessive leniency or strictness. In some cases. The ratings on specific factors can be summated to obtain a composite performance score. are likely to help the superiors to evaluate their subordinates effectively. METHODS OF PERFORMANCE APPRAISAL Strauss and Sayles have classified performance appraisal into three groups: traditional performance rating. descriptive phrases are given in the form to guide the rater while evaluating the rates. These steps. Such rating is highly subjective in the absence of objective standards. The basic criticism of the traditional performance rating is concerned with its emphasis on personality traits instead of job performance. delegation. such as. The conventional rating scale form incorporates several factors. attempts are made to accomplish the rating by a committee consisting of the immediate supervisor.9. and leadership. different standards of judgments . the central tendency. if followed carefully. there is a divergence of opinion among raters as to what is meant by such standards as “unsatisfactory”. organising ability. A brief description of each is as follows: (a) Traditional Performance Rating: Traditional rating involves a completion of a form by the immediate supervisor of the individual who is being evaluated. On the basis of ratings on specific factors. The rating is assigned by putting a tick mark horizontally. judgment. the supervisor’s superior and one or two more officers of the company who are familiar with the rates. they are highly time-consuming. newer-rating method. “good” and so on. This method is very simple to understand and easy to apply. dealing with people. Second. Although ratings by the committee bring several viewpoints together and overcome the superior’s bias. Frequently. and result-oriented appraisal. There should be provision for challenge and review of appraisals.
Fifth. the appraiser is unable to introduce personal bias into the evaluation process because he does not know which of the statements is indicative of effective performance. each individual is compared with every other individual. (ii) Paired-comparison System\: Under this. Moreover. attempts have been made to devise new procedures which are less susceptible to the above weaknesses. This method becomes complicated when the number of individuals for evaluation is large. there is an error of central tendency involving a cluster of ratings near the middle of the scale. i. critical incident and field review. This procedure can be used for numerous traits if required by evaluating the individuals separately on each trait. If the evaluation process involves several traits. a person is assessed relative to his performance in the group he works. there is a chance of the occurrence of a halo effect. (iii) The Forced Distribution Procedure: It is a form of comparative evaluation in which an evaluator rates subordinates according to a specified distribution. the one which best fits the individual and one which least fits. second. Since the appraiser does not know the score value of statements. Among these are included rank order. Here judgments are made on a relative basis.e. Sixth.among the raters. The appraiser is required to put a tick-mark against the name of the individual whom he considers better on the trait in question. and each of these statements is assigned a score. paired comparison. (iv) The Forced Choice Technique: It forces the rater to select from a series of several statements or traits. Although this method is simple to understand and easy to apply. The final ranking is determined by the number of times he is judged better than the other. These methods are discussed below: (i) The Rank-order Procedure: It is effective where ten or lesser number of individuals are to be evaluated. forced distribution forced choice. Third. this method prevents the rater from deliberately checking only the most favourable trait. Fourth. third and so on. there is a tendency on the part of the raters to assign high ratings to individuals holding high paid jobs. According to this procedure. (b) Newer Rating Methods: Because of several inadequacies in the traditional rating scale. this technique becomes cumbersome and difficult when a large number of employees are to be evaluated in the organization. each individual is assigned such ranks as first. the ranking is made separately for each trait. This enhances . The forced distribution method is primarily used to eliminate rating errors such as leniency and central tendency. the raters may be susceptible to excessive leniency or strictness error..
The field review process involves review of employee records. and interviews with the employee. George S. Superiors are trained to be on the lookout for critical incidents on the part of the subordinates in accomplishing the job requirements. Carroll and Tosi (1973). Drucker pointed the importance of managers having clear objectives that support the purposes of those in higher positions in the organization. (c) Results-Oriented Appraisal: The results-oriented appraisals are based on the concrete performance targets which are usually established by superior and subordinates jointly. usually someone from the corporate office or from the employee’s own human resource department. as expressed by its foremost proponent. note its following characteristics: . and sometimes with the employee’s superior. However. is: “Management by objectives is a process whereby the superior and subordinate managers of an organization jointly identify its common goals. define each individual’s major areas of responsibility in terms of the results expected of him.” Much of the initial impetus for MBO was provided by eter Drucker (1954) and by Douglas McGregor (1960). Under this procedure. attempts are made to devise for each job a list of critical job requirements. Field review as an appraisal method is used primarily in making promotion decisions at the managerial level. it is a costly technique and also difficult for many raters to understand. the problems of appraisal of performance are minimized. (vii) The Field Review: It is an appraisal by someone outside the employee’s own department. and use these measures as guides for operating the unit and assessing the contribution of each of its members. The merit of this procedure is that all evaluations are based on objective evidence instead of subjective rating. This procedure has been known as Management by Objectives (MBO). in an extensive account of MBO. Field reviews are also useful when comparable information is needed from employees in the different units or locations. MBO in essence involves the setting out clearly defined goals of an employee in agreement with his superior. MBO: The definition of MBO. Dr.the overall objectivity of this procedure. Odiorne. tend to build up a record of each subordinate with debit on the minus side and credit on the plus side. (v) The Critical Incident Method: This technique of performance appraisal was developed by Flanagan and Burns. McGregor argues that by establishing performance goals for employees after reaching agreement with superiors. The superiors enlist the incidents as they happen and in the process. Drucker first described management by objectives in 1954 in the Practice of Management.
In the appraisal process. to help the subordinate achieve the agreed upon _goals. The establishment of organizational goals. The setting of individual objectives in relation to organizational goals. which takes place regularly to evaluate progress towards specified goals. Define the job. Superior and subordinate get together and jointly agree upon the list the principal duties and areas of responsibility of _the individual’s job. with the subordinates. 7. In the goal-setting phase of MBO. 2. Review. The subordinate sets his own short-term performance goals or targets in cooperation with his superior. 8. . Organizational commitment. Some freedom in developing means of achieving objectives. as decided upon. He tries. 5.1. At those meetings. There are four main steps in MBO: 1. It is a result oriented philosophy. A periodic review of performance as it relates to organizational goals. on a day-to-day basis. MBO is. 5. 4. Mutual goal-setting. 6. The process focuses upon results accomplished and not upon personal traits. 6. a major component of MBO is the performance review session between the superior and subordinate. thus. Along with mutual goal-setting. a method of mutual goal-setting. his or her key responsibilities and duties. They agree upon criteria for measuring and evaluating performance. The key features of management by objectives are as under: 1. 2. Effective goal-setting and planning by top management. 3. new or modified goals _are set for the ensuing period. a superior and subordinate discuss job performance problems and a goal is agreed upon. Frequent individual performance reviews. taking action to assure goal attainment. 7. From time to time. the superior plays less of the _role of a judge and more of the role of one who helps the _subordinate attain the organization goals or targets. feedback. the superior and subordinate get together to evaluate progress towards the agreed-upon goals. enabling an employee to measure progress toward a goal which Performance and Potential Appraisal the employee often has helped to set. He counsels and coaches. and participation. measuring progress towards the goals. The superior plays a supportive role. 4. 3.
MBO as a mutual goal setting exercise is most appropriate for technical. 2. MBO is a tool that is inextricably connected with team building so that the work commitment of team members can be increased and their desire to excel in performance can be inspired. and policy integrity. Lines of responsibility. It is important to have effective team work among a group of managers or a group of subordinates. Measure the results. Here specify in measurable terms what the person is expected to achieve. budget allocation. personnel. 3. MBO has many benefits. Co-ordinates individual performance with company goals. and discover new ways to solve problems. supervisory. and accountability remain clear.2. The group of employees or subordinates must be looked upon as a team that needs to be brought together. In these positions. . The basic superior subordinate relationship in an organization is in no way undermined in this concept of team goal setting. A successful installation of MBO requires written mission statements that are prepared at the highest levels of top management. 4. since it: 1. professional. Hold periodic performance review meetings with subordinates to discuss and evaluate the _latter’s progress in achieving expected results. and also by teams. it serves as a powerful and useful tool for the success of managerial performance. Define expected results (set objectives). 4. 3. appraise. tackle new projects. Goals should be set by manager-subordinate pairs. Mission statements provide the coherence in which top-down and bottom-up goal setting appear sensible and compatible. and executive personnel. authority. there is generally enough latitude and room for discretion to make it possible for the person to participate in setting his work goals. Clarifies the job to be done and defines expectations of job accomplishment. Improves superior-subordinate relationships through a dialogue that takes place regularly. MBO can be applied successfully to an organization that has sufficient autonomy. Compare actual goals achieved with expected results. Too often MBO is installed top-down in a dictatorial manner with a little or no accompanying training. Provides a way for measuring objectively the performance of subordinates. This method is generally not applied for lower categories of workers because their jobs are usually too restricted in scope. If properly implemented. Provide feedback. Managers are expected to perform so that goals are attained by the organization. There is little discretionary opportunity for them to shape their jobs.MBO may be viewed as a system of management rather than an appraisal method.
to benefit from 360 degree feedback. This form of performance evaluation can be very beneficial to managers because it typically gives them a much wider range of performance-related feedback than a traditional evaluation. and their own subordinates. even friends and spouses. Develops factual data for promotion criteria. such as: 1.5. 3. The 360 degree feedback refers to the practice of using multiple raters often including self-ratings in the assessment of individuals. 8. which is known as 360 degree appraisal . and so on. Thus. Central Televisions. Serves as a device for integration of many management functions. and internal and external customers. 2. MBO has certain potential problems. and opportunity for career development 6. 4. Of course. suppliers and business associates. rather than focusing narrowly on objective performance. Its objectives are often difficult to establish. in most performance evaluations a supervisor evaluates the performance of subordinate. Semco Brazil. It concentrates too much on the short run at the expense of long-range planning.their boss. self-discipline and self-control. Stimulates self-motivation. Thus. especially incentive bonuses. British Petroleum. Fosters increased competence. 5. Many American companies are now using this 360 degree feedback.a performance management in which people receive performance feedback from those on all sides of them in the organization . a . in India this system of appraisal is uncommon. the feedback comes from all around. their colleagues and peers. a new approach has been enunciated by the western management gurus. British Airways. 7. That is. human resource professionals. Recently. The manager is likely to hear some personal comments on sensitive topics. Companies that practice 360 degree appraisals include Motorola. 9. such as sales increase or productivity gains. 360 degree often focuses on such things as interpersonal relations and style. The list can grow to include vendors and consultants. Traditionally. It may lead to excessive time consuming. personal growth. 10. It often lacks the support and commitment of top management. Its implementation can create excessive paperwork if it is not closely monitored. Barring a few multinational companies. a manager must have thick skin. Aids in an effective overall planning system. It is also a move towards participation and openness. Supplies a basis for more equitable salary determination. which may be threatening.
It helps cascade corporate level measures to lower level so that the employees can see what they must do well to improve organizational Effectiveness and helps focus the entire organization on what must be done to create breakthrough performance. and the assessee’s subordinates. Do the appraisal forms really get the information to serve the purposes? 3. which enables organizations to clarify vision and strategy before initiating action. Balance Score Card: The Balance Score Card (BSC) creates a template for measurement of organizational performance as well as individual performance. Are the appraisal forms designed to minimize errors and ensure consistency? 4. It is a measurement based management system. Do the processes of the appraisal serve the purpose of effective communication between the appraiser and the _appraisee? 5. BSC was introduced in 1992 by Dr.360 degree feedback system must be carefully managed so that its focus remains on constructive rather than destructive criticism. The assessment can be accomplished by an individual or by a combination of the immediate superior. thus making it operational and highly effective. It is desirable to make the immediate superior a party to the appraisal programme. BSC translates strategy into performance measures and targets. a higher level manager. Assessment Centre Experts from various departments are brought together to evaluate individuals or groups specially their potentials for promotions. Are the evaluation and developmental components separated? . the assessee himself. Training of appraisers has been largely stressed as a measure to improve performance appraisals. Appraisers can be trained with a view to improving their ability to evaluate subordinates and discuss evaluations with them effectively. a personnel officer. What purposes does the organization want its performance appraisal system to serve? 2. PERFORMANCE APPRAISAL ASSESSMENT The quality of an appraiser is much more crucial than the appraisal methods. other managers acquainted with the assessee’s work. Robert Kaplan and David Nortan and has been successfully adopted by numerous companies worldwide. The following questions can provide an assessment of performance appraisal system: 1. Are supervisors rewarded for correctly evaluating and developing their employees? 6. It is also a monitoring system that integrates all employees at all levels in all departments towards a common goal.
If one requires to be appraised on how well he performs the leadership role. Did the subordinate learn something new about the superior and pressures he or she faces? 7. Did the appraisal session motivate the subordinate? 2. Perhaps. but also by those supervised (subordinates) and peers. Therefore. which is yet to take off seriously in many organizations. Does the subordinate have a clear idea of what corrective actions to be taken to improve his/her own performance? PERFORMANCE APPRAISAL IN PRACTICE Traditionally appraisals are carried out by the supervisors of the employees. all the three approaches. Did the superior learn something new about the subordinate? 6. appropriate weightage is required to be assigned for appraisals being carried out in the 360 degree system. It is quite disappointing to note that appraisals are not being carried out with the due importance and seriousness they deserve though the systems provide scope for periodic and timely appraisals. goals. which is known as 360 degree appraisal whereby appraisals are required to be carried out not only by the supervisors. topbottom. Did the superior arrive at a fairer assessment of the subordinate? 5. Are the appraisals being implemented correctly? The following questions serve as guidelines for assessing the end-product of performance appraisal: 1. This argument is quite valid for higher level executives including CEOs. the leadership attributes need to be appraised only by those being supervised. achievements. A new approach has been recently enunciated by the western management gurus. While the supervisors can appraise. the appraisal should originate from the followers (bottom to top approach) and not from their supervisors alone. bottom-top and peer level appraisal will be very relevant. Did the appraisal build a better relationship between the supervisor and the subordinate? 3. Did the subordinate come out with a clear idea of where he or she stands? 4. Are superiors relatively free from task interference in doing performance appraisal? 8. Many organizations do follow monthly and quarterly appraisals for . Some companies do follow self appraisal and compare the same with the traditional appraisal of the supervisors. targets.7. on the performance standards. Normally appraisals are being carried out once a year or at the most twice a year as per the existing practice. This approach also needs a relook in the context of leadership concepts being practiced universally.
and follow the by-annual or annual appraisal system thereafter. Developing suitable appraisal instruments and scoring devices. 3. 10. Granting employees opportunities for appeal whenever and wherever such action is appropriate. Identifying job responsibilities and duties and performance dimensions. to be scientifically carried out day in day out. 5. CONCERNS AND ISSUES IN APPRAISAL 1. Prioritizing and weighing performance dimensions and performance goals. monitoring and auditing processes to ensure proper operation of the system and to identify areas of weakness.management trainees till they are confirmed. Establishing procedures that enhance fair and just appraisals of all employees. Designing. 8. Appraisal is a continuous process. Providing performance feedback to all employees. 2. 9. if one has to seriously carry out appraisals. Relating observed and identified performance to the rewards provided by organization. standards and goals. 4. The basic issues addressed by performance appraisal are: What to appraise? How to appraise fairly and objectively? How to communicate the appraisal and turn the total process into a motivator? How the performance appraisal results can be put to good use? How to implement the performance appraisal system smoothly? . 6. 7. Determining appropriate methods for appraising performance. Training of employees in all phases of the appraisal system.
COMPANY PROFILE .
It is the pursuit of truth with the help of study. SAMPLING UNIT: The area. Sometimes.” define and redefining problem. which is taken for study. formulating hypothesis or suggested solution. researcher compromise. In short. is Ashok Leyland. Researcher is thus an original contribution to the existing stock of knowledge making for its advancement. comparison and experiment. Ennore. formulating the hypothesis collecting the facts or data. observation. Some consider researcher is a movement from the known to the unknown. SAMPLE SIZE: DESIGNATION Employees TOTAL SAMPLE SIZE 50 50 The sample size taken for the project is 50. Chennai. . collecting . It is actually a voyage of discovery. the study of knowledge through objective and systematic method consisting of enunciating the problem.RESEARCH METHODOLOGY Meaning of Research: “Research means a search for knowledge”. According to Clifford woody. making deduction and reaching conclusion. analyzing the facts and researching certain conclusion either in the form of solution towards the concerned problem or in certain generalist for some theoretical formulations. Intact researcher is an art of scientific investigation. Redman and Moray define researcher as a “systematic efforts to gain new knowledge”. and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis”. it may refer to scientific and systematic search pertinent information on a specific topic.organizing and evaluating data.
07.2009 to 15. Convenience sampling as the name implies is based on the convenience of the researcher who is to select the sample. Convenience sampling technique is followed.06. The formula is = No of Respondents Total Respondent .2009). Period of study The study was conducted for 1 month at Ashok Leyland. and data was collected from (16. Thus the researcher may stand at a certain prominent point and interview all those or selected people who pass through that place. They are presented pictorially by way of graphs in order to have better understanding.SAMPLING PROCEDURE Convenience sampling has been used to collect the data from the respondents. STASTISTICAL TOOLS The statistical tools used for analysis are: Percentage method Weighted average PERCENTAGE METHOD In this method frequency of the various criteria factors are tabulated and the percentage for each value with respect to the total is found out. This type of sampling is also called accidental sampling as the respondents in the sampling are included in it merely on account of that being available on the spot where the survey is in process.
WEIGHTED AVERAGE METHOD
Under this method the relative importance of the different items is not the same. The term weights stands for relative importance of the different items. The formula for calculating the weighted arithmetic mean is X = ∑WF ∑F Where, X F = = weighted arithmetic mean Frequency or no of respondents
LIMITATIONS OF THE STUDY
1.Time is important limitation due to the time constraints only few employees is taken for the
study. 2. The study is limited to the employees deployed in Ashok Leyland. 3. The study process often overlooked by management so redtapism involvement could manipulated desired result.
DATA ANALYSIS AND INTERPRETATION Appraise Survey
1. Expectations from Appraisal System :
Respondents were asked to rank the various options according to their preference. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was given on the basis of ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on.
Particular Salary Administration and Benefits Determination of promotion or transfer Assistance in goal Guideline for training plan An insight into your strengths and weakness Decision to layoff
Score 87 109 228 254 312 354
Overall Rank 1 2 3 4 5 6
From the above table it can be seen that employees expect “Salary Administration and Benefits” to be the main reason for conducting a Performance Appraisal. “Decision to layoff” is of least importance as per the appraise.
2. Awareness about Responsibilities :
Awareness about Responsibilities
From the graph it can be seen that majority of employees are aware about their responsibilities, which implies that the appraisers have efficiently communicated to the appraisees all the parameters that will be taken into account during appraisal.
. Only a meager 30% were dissatisfied with the Performance Appraisal programs. Satisfaction Level among appraise regarding Appraisal System : Satisfaction Level 5% 2% 23% 28% Fully Dissatisfied Partially Dissatisfied Satisfied 42% Partially satisfied Fully satisfied From graph it can be seen that majority of the respondents are satisfied with the appraisal system.3.
. Awareness about performance ratings : Awarness about Performance Rating Yes 34% No 66% This clearly shows that majority of the employees are not aware about the performance ratings that are taken into account while conducting a performance appraisal.4.
Alowing Self ratings : No 8% Self Rating Should be allowed Yes 92% From graph it can be seen that majority of respondents want self rating to be a method of conducting the appraisals .5. .
6. Chance to rate your own performance Rate your own performance Yes 23% No 77% From the graph we can see that majority of the employees are not given a chance to rate their own performance in the organization. .
Timing of Appraisals Timing of Appraisal 2% 3% 11% Monthly Quaterly 84% Half Yearly Annual This shows that most of the organisations conduct their Performance Appraisal programs annually. The share of the quarterly and monthly appraisals are extremely minimal.7. A very small percentage of the organisations conduct Performance Appraisals on a half yearly basis. .
.8. Credibility of Appraiser Credibility of Appraiser 37% Yes 63% No This shows that according to the employees/appraisees the credibility of the appraiser is extremely important and it has an effect on the overall Performance appraisal program.
Complaint channel for employees Complaint Channel for employees 27% Yes 73% No This shows that there is no proper complaint channel existing in the organisations for the employees who are dissatisfied with the performance appraisal system.9. .
10. . Standards communicated to employees Standards Communicated to Employees 36% Yes 64% No From this it can be seen that there is a clear majority among the employees who say that the standards on the basis of which the performance appraisal is carried out is not communicated to the employees before hand.
. Rating committees carry out the performance appraisals. Appraisals by subordinates and Self rating as a method of Performance Appraisal.11. Performance Appraisal Performance Appraisal 0% 0% 9% 0% Immediate Supervisor Peer appraisal 91% Rating committee Self Rating Almost all the Performance Appraisals are carried our by the Immediate Supervisor in these organisations. In very few organisations. None of the organisations use Peer Appraisals.
12. . Clear understanding of Appraisee’s job Clear understanding of Appraisee's Job 23% Yes 77% No This shows that the performance Appraisal programs are successful in giving a clear understanding of the appraisee’s job to both appraiser and appraisee.
. The remaining half are not clear about the objective for which the Performance Appraisal is carried out. Objectives of Appraisal System Objective of Appraisal System 50% 50% Yes No From the figure we can derive that the objective for conducting the Appraisal system is clear only to half of the employees.13.
14. Good communication between top management and business goals Good communication between Top management and Business goal 22% Yes 78% No This shows that the appraisal systems do not provide a good communication flow of the top-management plans and business goals to the staff below. .
15. Comments and suggestions to be considered Comments and suggestion to be considered 2% Yes 98% No Almost all the employees expect that their comments and suggestions should be taken into consideration while conducting the Performance Appraisal. .
16. . Post Appraisal interview Post Appraisal Interview 30% Yes 70% No As per the response from the employees we can see that there is no interview conducted after the appraisal program for majority of the employees.
Appraiser Survey 1. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was done on basis of these ranks. Then the total score for each purpose was calculated and overall ranking was given. Purpose of Appraisal Purpose of Appraisal System Score An insight into your strengths and weakness Guideline for training Plan Assistance in goal Decision on layoff Determination of promotion or transfer Salary Administration and Benefits 24 27 42 69 72 81 Respondents were asked to rank the various options according to their preference. 1 mark was allotted to rank 1. 2 marks for rank 2 and so on. . Particular Determination of promotion or transfer Salary Administration and Benefits Decision to layoff Guideline for training plan Assistance in goal An insight into your strengths and weakness Score 24 27 42 69 72 81 Overall Rank 1 2 3 4 5 6 From table it can be seen that appraiser considers “Determination of promotion or transfer” & “Salary administration and Benefits” as two important factors for conducting an Appraisal.
2. from the graph it can be seen that majority of appraisers have rated 5.4 & 3 which implies that Performance Appraisal system is very helpful in Planning their work. . Also most of the appraisers are satisfied with the appraisal system. Appraisal System Appraisal System 0% 0% 13% 27% 1 2 3 60% 4 5 In this question appraiser was asked to rate how helpful the appraisal system is.
3. From results it is seen that the performance appraisal system is very helpful in communicating the support and help needed by the appraiser from the appraisee. . Support from subordinate Support from Subordinate 0% Yes No 100% This question was asked to find out how helpful appraisal system is in communicating the support that apprasier needs from appraisee.
4. As 360 degree feedback gives feedback of appraisee from everyone interacting with him. Type of Appraisal System Type of Appraisal System 0% 0% 14% 13% Assessment centre MBO BARS 360 degree feedback 73% From results its clear that majority of companies prefer to use “360 degree feedback” system for Performance Appraisal. it is more reliable and hence most preferred. .
which shows that companies consider Qualitiy of product & service and Customer satisfaction as most important factors. .5. Performance Appraisal criteria Performance Appraisal criteria 20% 20% Quantitative outcome criteria Qualitative process criteria Quantitative process criteria 60% From results we can see that Qualitative Process is considered as the most important criteria for which the Performance appraisal programs are carried out.
Timing of Appraisals Timing of Appraisal 0% 0% 0% 13% Annual Quaterly Half Yearly 87% Monthly Anytime From graphs we can see that most of companies conduct appraisals on annual basis.6. . Some companies conduct quaterly also.
7. . Thus resulting in reduction of output. Effect of poor Appraisal System Effect of Poor Appraisal System 27% 0% 73% Ineffective teamwork De-motivation Retention It can be seen from results that most of the employees get De-motivated because of a poorly conducted appraisal. To some extent employees dont coordinate with their team members.
Communication between top management and staff Good Communication between Top Management and Staff 0% Yes 100% No All appraisers totally agree that performance appraisal helps in communicating the top management plans and business goals to staff at lower level.8. .
9. Insight to Apprasiee’s strength and weakness Insight into Appraisee's Strength and weakness 33% Yes 67% No It is evident from the results that performance appraisal system doesn’t help the appraiser in understanding strength and weakness of apraisee. .
Performance Appraisal system is designed by appraiser without consulting appraisee. Appraisee’s comment and suggestion Appraisee's comment & suggestion 13% Yes 87% No From the results it can be seen that appraisee’s comments and suggestion are not taken into consideration before Performance Appraisal.10. .
Performance Appraisal Performance Appraisal 0% 0% Immediate supervisor Peer appraisal Rating committees Self-rating 100% It is evident from the results that performance appraisal is conducted by the Immediate Supervisor in all the companies.11. 12. Understanding of Apprasiee’s Job Understanding of Appraisee's Job 0% Yes 100% No From this it is clearly seen that according to appraiser there is a clear and joint understanding of the appraisee’s job. .
13. . Standards for Performance Appraisal Standards for Performance Appraisal 13% Yes 87% No From results it is evident that Performance appraisal standards are very well communicated to Appraisee before the Appraisal is carried out.
Self rating in Performance Appraisal Self Rating in Performance Appraisal 0% Yes 100% No From results it can be clearly seen that the Appraisee is not given a chance to rate his own performance.14. .
. Action after Performance Appraisal Action after Performance Appraisal 0% Yes 100% No This shows that most of the companies act upon the results of their Performance Appraisal program.15.
The frequency of appraisal in all organizations is yearly. This basically to confirm them. On an average 85% of the employees in an organization are motivated by performance appraisal. …………it is seen that the employees are not satisfied with the way they are appraised or they haven’t been appraised properly. These appraisal systems differ on the factors on which a person is rated and the nature of duties handled by him. bonus.use the data that is maintained for every employee to compare the performance over a period of time. this system has been implemented in …………. A good deal of respondents felt that appraisal is likely to be more successful when it is linked with financial and semi-financial incentives like promotion. For this matter. Very few companies make use of this data for retrenchment as proof of poor performance..Findings …………. All organizations have goal setting as part of appraisal. a mid-term review is also undertaken. Most of the companies have a separate appraisal system for the new employees. 360o degree feedback system is not very popular in the Indian companies. increments. This data is then compiled and the final appraisal is conducted at the end of the year. ……………. Some companies also use this data for making decision regarding job rotation. In most of the cases the immediate supervisors is the appraiser but sometimes it is also the HR department or the HOD.has separate appraisal system for each level of employees. This increases the commitment from the parties concerned the appraisal and the appraisee. Where appraisal is based on Key Result Areas. This system can be adopted and is successful only in the presence of an open organizational climate. who are on probation. Among the companies under study. The performance is evaluated against these targets. succession planning. . almost all the companies have interview and discussion.
…………. is satisfied with the current performance appraisal system and do not require any changes…………they would like to provide more training to appraisers. . It is normally done for new employees. if possible appraisal form should be standardized. No monitoring is done to find out any loop holes in the performance appraisal system and if it exists. In most of the organizations training is provided for the appraisal system one to two weeks before the appraisal and also when new or revised Performance appraisal system is introduced. Performance appraisal is surly a good indicator (about 80%) for the training and developmental need of the employees.. it is on informal basis (feedback every year). weightage to few traits of employee need to be rewarded. Awareness sessions about the performance appraisal (objectives and importance) are conducted.
Like the Rating method combined with assessment center method would give an evidence of poor/unfavorable or outstanding behavior of the appraisee. The employees who have excellent performance should be used as a mentor for other employees which would motivate others to perform better. Financial and non-financial incentives should be linked to the annual appraisal system so that employees would be motivated to perform better. job design and work environment based on the performance appraisal.Conclusions and Suggestions Performance appraisal should not be perceived just as a regular activity but its importance should be recognized and communicated down the line to all the employees. Combining the different methods of appraisal can minimize the element of biasness in an appraisal. Introducing online-appraisal can do this. Employees should be given feedback regarding their appraisal. New methods of appraisal should be adopted so that both appraiser and the appraisee take interest in the appraisal process. It should provide more empowerment to the employees. It should bring more clarity to the goal and vision of the organization. . Constant monitoring of the appraisal system should be done through discussions. interactions. The frequency of training program for the appraiser should be increased and these sessions should be made interactive. if any. New mechanisms should be evolved to educe the time factor involved in the procedure of appraisal. This will help them to improve on their weak areas. The awareness sessions for the employees/appraisees should be made more interactive and the views and opinion of the appraisees regarding appraisal should be given due consideration. suggestions. Assistance should be sought from specialists for framing a proper appraisal system that suits the organization climate. There should be a review of job analysis.
Some of the performance appraisals should be conducted by the top management so that they can understand the employees and their needs. ……………. Recognizing the good performers i.still follow the traditional methods of appraisal that should be transformed into the modern one. The appraisal system should cover all employees in the organization both white collar and blue-collar jobs. assessment centers which are more effective. appraisees who have accomplished the targets for the year can help in getting more commitment from the employees. Information regarding the performance of the employees should be kept in proper manner.e. behavior better and to find out the loopholes. Performance appraisal should be effectively link to the performance management system of the organization. . Use of modern appraisal techniques like 360o appraisal. More transparency should be brought about in the appraisal system..
Questions for Appraisee Name: ___________________________ Contact No: __________________________ 1. 1 being most preferred & 6 being least preferred) Detail Salary Administration and Benefits Determination of promotion or transfer Decision on layoff Assistance in goal Guideline for training Plan An insight into your strengths and weakness Rank 2. No 5. Yes b. Are you satisfied with the appraisal system? 1 2 3 4 5 (1 = Least satisfied. Are you given a chance to rate your own performance? a. Timing of Appraisals a. Are you aware of performance ratings? a. No 6. Do you know what exactly is expected from you at work? a. Do you think you should be given an opportunity to rate your own performance? a. What do you expect from a Performance appraisal : (Rank the options from 1 to 6. Yes b. Yes b. Monthly . No 3. No 7. 5 = Most satisfied) 4. Yes b.
d. No 16. Does the credibility of Appraiser affect the Performance Appraisal System? a. Yes b. No . Are the objectives of appraisal system clear to you? a. Quarterly Half Yearly Annual Anytime 8. Yes b. Peer appraisal c. Is there a post appraisal interview conducted? a. Are the standards on the basis of which the performance appraisal is carried out communicated to the employees before hand? a. Do you want your comments and suggestions to be taken into consideration during appraisal? a. Yes b. e. Yes b. No 11. Yes b. Yes b. c. Is there a complaint channel for the employees who are dissatisfied with the performance appraisal system? a. Rating committees d. Yes b. No 13. No 9. Yes b. No 14. No 15. Who conducts the performance appraisal”? a. Immediate supervisor b.b. Appraisal by subordinates 12. Is the performance Appraisal successful in giving a clear understanding of the appraisee’s job to both appraiser and appraise? a. No 10. Self-rating e. Does the appraisal system provide a good communication between the topmanagement plans and business goals to staff below? a.
Conduct /Trait) . 360 degree feedback e. MBO c. Is the Performance Appraisal helping you to plan your work well? Rank 1 2 3 4 5 (1 = Least helpful. Does the system provide you a chance to communicate the support you need from your subordinate to perform the job well. Quantitative process criteria (Efficiency. Assessment centre b. Customer satisfaction) c. Attendance) d.Questions for Appraiser Name: ___________________________ Contact No: __________________________ 1. Performance Appraisal criteria a. Yes b. a. Productivity. Qualitative process criteria (Quality of product or service. Cost/expenses. Goal accomplishment rate) b. Work attitude. No 4. Purpose of Performance appraisal : (Rank the options from 1 to 6. Balance scorecard 5. Quantitative outcome criteria (Sales volume. Leadership. Which appraisal system is being employed in the company? a. Sales price. BARS d. 5 = Most helpful) 3. Qualitative process criteria (Judgment. 1 being main purpose & 6 being last purpose) Detail Salary Administration and Benefits Retain performing employees Determination of promotion or transfer Decision on layoff Assistance in goal Guideline for training Plan 2.
Yes b. Immediate supervisor b. Self-rating e. Yes b. Rating committees d. Annual e. What do you think is the effect of a poor appraisal system a. Is the performance Appraisal successful in giving a clear understanding of the appraisee’s job to both appraiser and appraise? b. Are employee’s comments and suggestions taken into consideration before the appraisal? a. No 9. Yes b. No 11. No 10. Appraisal by subordinates 12. De-motivation b. Peer appraisal c. Anytime 7. Does it give insight to appraise regarding his strength or weakness? a. Quarterly c. Half Yearly d. No .6. Does the appraisal system provide a good communication between the topmanagement plans and business goals to staff below? a. Retention c. Yes b. Timing of Appraisals a. Monthly b. Ineffective teamwork 8. Who conducts the performance appraisal” a.
then mention the remedial measures taken? . Yes b. Yes b.13. Do you give an opportunity to the appraisee to rate his own performance? a. Do you act upon the results of your performance appraisal? a. If yes. Are the standards on the basis of which the performance appraisal is carried out communicated to the employees before hand? a. Yes b. No 14. No 15. No 16.
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