Objectives

1. Using the liquid waste to decrease the water pollution

2. Using a renewable energy which is the geothermal energy
3. Finding a new efficient way of energy
4. Cost minimization of heating & cooling process in the industries
5. Finding out a new innovative way & the system

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 1

 INDUSTRIAL MANAGEMENT
COURSE NO : IPE-335
GROUP NO : A

 SUBMITTED TO: GROUP MEMBERS:

NAME REGISTRATION NUMBER

 Dr. Mohammad Iqbal 1. Md.Ashraful Islam 2017334005

Professor, 2. Billal Ahmed 2017334008
3. Md.Khorshed Alam 2017334009
 Department of IPE,SUST 4. Mehedy Hasan Niloy 2017334010
5. Saikat Rakshit 2017334015
6. Nurul Hasnat Navid 2017334016
7. Md.Sohel Miah 2017334020
8. Md.Sazid Alam Patwary 2017334025
9. Asif Ahmed Fahim 2017334007
GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 2
 PERFORMANCE
APPRAISAL &
COMPENSATION

DATE: 20-09-2020

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 3

 About OBJECTIVES
PERFORMANCE FACTORS
APPRAISAL TYPES
DEFINITION MANAGEMENT
OBJECTIVES
METHODS Closing
CONTEXT ADVANTAGES
DISADVANTAGES
Summary
Questions and
Answers
About
COMPENSATION
DEFINITION

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 4

 PERFORMANCE APPRAISAL

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 5

ABOUT PERFORMANCE APPRAISAL

DEFINITION OBJECTIVES METHODS ADVANTAGES DISADVANTAGES

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 6

 PERFORMANCE APPRAISAL
DEFINITION
What is Performance?
Employees are performing well when
they are effective, productive and
reaching the set goals or company
targets. An employee who is at work on
time, rarely absent, who reduces the
number of work-related accidents and
who has an appropriate level of
productivity will be considered a good
performer.
What is Appraisal?
A famous French president was known to
start his day with a call to his astrologer
asking him: how am I performing? How is
my country performing?
A performance appraisal is an evaluation
of employees by supervisors. Most
employees wish to have feedback on
their job performances. Appraisals are
helpful in many human resource
decisions: selection, training, promotion,
transfer, wage, salary…and, appraisals
may aid in improving overall personnel
performance.

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 7

 PERFORMANCE APPRAISAL
DEFINITION
Definitions According to
Newstrom,
“It is the process of evaluating
the performance of
employees, sharing that
information with them and
searching for ways to improve
their performance’’.
Performance appraisal is the
step where the management
finds out how effective it has
been at hiring and placing
employees.

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 8

 PERFORMANCE APPRAISAL
DEFINITION
A “Performance appraisal” is
a process of evaluating an
employee’s performance of a
job in terms of its
requirements.
 P-Purpose
 E-Empowerment
 R-Relationship
 F-Flexibility
 O-Optimal performance
 R-Recognition & Rewards
 M-Morale

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 9

 PERFORMANCE APPRAISAL
OBJECTIVES
According to Employee:
 Concrete and tangible
particulars about their
work
 Assessment of
performance
Aims at:
 Personal development
 Work satisfaction
 Involvement in
organisation

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 PERFORMANCE APPRAISAL
OBJECTIVES
According to Organisation:
 Measuring the efficiency
 Maintaining organizational
control
Aims at:
 Mutual goals of the
employees & the
organisation
 Growth & development
 Increase harmony &
enhance effectiveness

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 PERFORMANCE APPRAISAL
METHODS
 ASSESMENT CENTRE METHOD

 BEHAVIOURALLY ANCHORED RATING SCALE

 CRITICAL INCIDENT TECHNIQUE

 ESSAY EVALUATION

 HUMAN ASSET ACCOUNTING METHOD

 MANAGEMENT BY OBJECTIVE

 PAIRED COMPARISON METHOD

 RATING SCALE

 TRAIT FOCUSED APPRAISALS

 360 DEGREE FEEDBACK

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 PERFORMANCE APPRAISAL

ASSESMENT CENTRE METHOD

 The purpose of this method is to test candidates in
social situations.
 It can be used by startups for evaluating employees
serving at senior level.
 This method of evaluation is helpful for assessing
managers, who have to deal with their subordinate,
peers and supervisors for day-to-day business.
 It involves using situational exercises like an in-
basket exercise, role-playing incident, business game
and many other similar exercises.
 It gives the employer an insight to the personality of
the employee like openness, tolerance,
introversion/extroversion, acceptability, etc.

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 PERFORMANCE APPRAISAL

ASSESMENT CENTRE METHOD

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 PERFORMANCE APPRAISAL

BEHAVIOURALLY ANCHORED RATING SCALE

 This is latest a modern appraisal technique,
which has been developed recently.
 It is claimed that the Behaviourally
Anchored Rating Scale method is one of
the most equitable technique compared to
other methods of appraisals.
 It is a combination of narrative techniques
like essay evaluation and quantifiable
techniques like rating scale.
 It is comparatively more expensive than
other techniques, but it usually guarantees
precision and effectiveness.

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 15

 PERFORMANCE APPRAISAL

BEHAVIOURALLY
ANCHORED
RATING SCALE

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 PERFORMANCE APPRAISAL

CRITICAL INCIDENT TECHNIQUE

 It involves making statements that describes
both the positive and the negative reactions
to stimulus by the employee at his work
place.
 The statements are recorded cumulatively in
a given period of time, so that one can
evaluate how good the employee is at his
job.
 His proficiency will be determined by how he
deals with his day-to-day activities
 The interviewer gives scenarios to the
interviewee and asks them, how they would
react to the given scenarios.

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 PERFORMANCE APPRAISAL

ESSAY EVALUATION
 The essay method is an affordable and
effective way of appraising employees,
especially in startups.
 This method involves writing a detailed
descriptive essay of the performance by the
employee’s direct supervisor or manager.
 The essay concentrates on describing the
various strengths, weaknesses, attitude and
behaviour of the individual towards job
duties
 It is far less complicated to execute
compared to the other methods, only if
biases could be kept at bay.

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 PERFORMANCE APPRAISAL

ESSAY EVALUATION

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 PERFORMANCE APPRAISAL

HUMAN ASSET ACCOUNTING METHOD

 This is a very commercial and practical performance
appraisal method for organisations.
 In this scenario, the human capital is associated with
the amount of revenue that individual generates, or
the number of happy customers, or the number of
leads generated in sales.
 It is a fair process from the point of view of the
organisation and the employee, because it directly
indicates the profitability of the company.
 This method is adopted by most startups, since it is
easy to execute and track.
 Therefore, the amount of business generated by an
employee determines whether he deserves to be
promoted or terminated.

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 PERFORMANCE APPRAISAL

MANAGEMENT BY OBJECTIVE
 A rather interactive and fair form of
appraisal,the Management By Objective
method is less time consuming and of course
cost effective.
 The technique involves setting up of objectives
and goals for the employee either by the
employer, or his manager, or both employee
and employer.
 This performance appraisal method helps the
employee to perform better,because he is well
aware of his goals and already knows the
quality and quantity that needs to be delivered

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 PERFORMANCE APPRAISAL

PAIRED COMPARISON METHOD

 This method bears more relevance and
importance in startups which have small
teams.
 It compares each employee with every
individual present in the same team and
depending on their comparative performance
to the employee who has performed the best,
appraisals are given.
 It is considered reliable because it follows a
systematic method of comparative evaluation.
 This technique is most apt when, the
organisation plans on giving appraisal only to
the best employee in the team.

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 PERFORMANCE APPRAISAL

PAIRED COMPARISON METHOD

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 PERFORMANCE APPRAISAL

RATING SCALE
 This performance appraisal method can be
used by startups and small businesses that
are scaling and are trying to set up processes
in place.
 This process-based and involves the
organisation to set pre-determined objectives
that employees are expected to meet.
 Individuals are then rated by their
supervisors or managers.They are expected
to meet a basic score. If they do not meet the
score then they are sent for performance
improvement training which would help them
cope up with their shortcomings.

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 PERFORMANCE APPRAISAL

RATING SCALE

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 PERFORMANCE APPRAISAL

TRAIT FOCUSED APPRAISALS

 This technique is useful for reinforcing
positive work ethics and culture in the
organisation.
 It considers attributes like helpfulness,
dependability, punctuality, etc for being
appraised by the organisation.
 It motivates employees to be competitive in
a fair manner and yet be available for helping
out colleagues if need be.
 Startups should consider giving their
employees trait focussed appraisals once in a
while, because it reinforces positive culture
in the organisation.

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 PERFORMANCE APPRAISAL

TRAIT FOCUSED
APPRAISALS

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 PERFORMANCE APPRAISAL

360 DEGREE FEEDBACK

 This method involves getting a feedback about
the employee from every individual who
interacts with him during his working hours.
 They can be his peers, his subordinates,his
superiors, customers who have interacted
with him and even he himself would be
interviewed about his perception of himself
and his duties at the workplace.
 This performance appraisal method would be
very useful for startups, because the best way
to review an employee’s overall performance
and get an insight about his behaviour,
personality and attitude this is the best
method to follow

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 PERFORMANCE APPRAISAL

360 DEGREE FEEDBACK

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 PERFORMANCE APPRAISAL
ADVANTAGES

PROMOTION COMPENSATION EMPLOYEES SELECTION MOTIVATION COMMUNICATION

DEVELOPMENT VALIDATION

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 PERFORMANCE APPRAISAL

DISADVANTAGES
1)Performance Appraisals are
once a year, maybe less
2)Limited Perspective
3)Erosion of Motivation
4)Time Consuming
5)Poorly Trained Managers
6)Subject to Appraiser Bias

This Photo by Unknown Author is licensed under CC BY-SA

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 COMPENSATION

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 32

ABOUT COMPENSATION
DEFINITION

OBJECTIVES

TYPES

FACTORS

MANAGEMENT

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 COMPENSATION
DEFINITION
Employees receive compensation
from a company in return for the
work performed. Most people
think pay & compensation to be
same, but the fact is compensation
is much more than just monetary
rewards provided by an employer.
Milkovich & Newman:
Compensation is all forms of
financial returns and tangible
services & benefits employees
receive as a part of an
employment relationship.

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DESIGING A COMPENSATION
COMPENSATION PLAN
Steps of designing
compensation plan:
i.Focusing on strategy objectives
ii.Ensuring commitment
through communication &
participation
iii.Analyzing job function
iv.Writing job description
v.Determining internal pay
equity

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 COMPENSATION
OBJECTIVES
i.Attract employees who are
qualified, experienced &
interested in organisation
ii.The employees are motivated
for better performance
iii.The employees do not leave
the employer frequently

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 COMPENSATION
COMPONENTS OF COMPENSATION
i. Basic wages : cash component of wage structure based on which other
elements of compensation may be structured
ii. Dearness allowance: enables him to face price rise or inflation
iii. Incentives: “payments by results”, depend on sales, profit, cost reduction
efforts etc.
iv. Bonus: fixed percentage, or n proportion to the profitability
v. Non-monetary benefits:
 Recognition of merit through certificate
 Offering challenging job responsibilities
 Promoting growth prospects
 Comfortable working conditions
 Competent supervision
 Job sharing and flexitime
i. Commissions: based on sales revenue or profit of company.
ii. Mixed plan: wages/salary + commission
iii. Fringe benefits ( indirect compensation)
 Paid vacation
 Pension
 Health insurance
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 COMPENSATION
TYPES OF COMPENSATION
 Direct compensation
i. Basic salary
ii. House rent allowance
iii. Conveyance
iv. Leave travel allowance
v. Medical reimbursement
vi. Bonus
vii. Special allowance :
 Overtime
 Mobile allowance
 Meals
 Commission
 Travel expense
 Insurance
 Club membership
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 COMPENSATION
TYPES OF COMPENSATION
 Indirect compensation
i. leave policy (paid casual leave, maternity
leave, sick leave)
ii. Overtime policy (overtime pay, transport
facility)
iii. Hospitalization (regular check ups)
iv. Insurance (accidental, life insurance)
v. Leave travel
vi. retirement benefits
vii. holiday homes & guest house
viii.flexible timing

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 COMPENSATION
FACTORS OF COMPENSATION
INTERNAL FACTORS
 capacity to pay
 top management philosophy
 job requirements
 org policies
 employee related factors
 productivity of workers
EXTERNAL FACTORS
 Compliance with law of the land
 Demand and supply of the labour
 Cost of living
 Government
 Prevailing wage rate
 Labour union & collective bargaining
EMPLOYEE RELATED
 Performance
 Seniority
 Experience
 B - PERFORMANCE APPRAISAL & COMPENSATION
GROUPPotential 20-Sep-2020 40
 COMPENSATION
OBJECTIVES OF COMPENSATION MANAGEMENT
 To provide fair and equitable remunerations
 To attract competent personeel
 To retain resent employees
 To improve productivity
 To control cost
 To improve union management relations
 To improve public image of company
 To improve job satisfaction
 To motivate employees
 Peace of mind
 Increase self confidence

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 Wrap Up

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 42

Thank you
QUESTIONS?

GROUP B - PERFORMANCE APPRAISAL & COMPENSATION 20-Sep-2020 43