Performance Appraisal
Introduction of Performance Appraisal
Meaning and definition of performance appraisal:
The meaning of the word “appraisal” is “to fix a price or value for something”. This is used in finance in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly performance appraisal is a process in which one values the employee contribution and worth to the organization. In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
DEFINITIONS OF PERFORMANCE APPRAISAL: A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is
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Performance Appraisal
probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
So the question arises what to do?
1.
Firstly the organization must realize that pay related performance appraisal is likely to be
effective only where jobs are designed in such a way that allows individual performance to be measured. Thus in situation characterized by high interaction among jobs in achieving results, group-related pay systems may be more appropriate. Thus before establishing company policies on the matter, it may be good idea to read about alternative methods for rewarding good performance the gain sharing or tying rewards to learn performance or the company performance rather than only to individual performance.
Job Analysis
Performance Standards
Translate job requirements into levels of acceptable or unacceptable performance
Performance Appraisal
Describes the jobrelevant strengths and weaknesses of each individual
Describes work and personnel requirement of a particular job
2.
Sometimes a combination of reward systems works much better and has fewer nasty side
effects than a single way of rewarding performance. 2
Performance Appraisal
The design of Employee Performance Appraisal and Development Plan thus formed would assist in evaluating employee performance and identifying their potential and guide in developing a plan to improve his/her performance as also to prepare him/her for greater responsibilities in case of promotions and transfers. It should be filled carefully, thoughtfully and objectively. Before an appraisal is made, the superior should ensure that he/she and the employee are in agreement concerning responsibilities, for result expected and what constitutes satisfactory performance. The whole approach is a positive one its purpose is improvement of individual’s ability and performance.
Introduction of Sharekhan
Sharekhan is the retail broking arm of SSKI, an organization with more than eight decades of trust & credibility in the stock market. • • • • Amongst pioneers of investment research in the Indian market In 1984 ventured into Institutional Broking & Corporate Finance. Leading domestic player in Indian institutional business Over US$ 1 billion of private equity deals
Sharekhan:
• Among the top 3 branded retail service providers (Rs 650 crs avg daily vol- Apr-Dec’04) • No. 2 player in online business • Largest network of branded broking outlets in the country servicing 81,000 clients
SSKI Group Companies:
• • • SSKI Investor Services Ltd (Sharekhan) S.S. Kantilal Ishwarlal Securities SSKI Corporate Finance 3
Performance Appraisal
•
Idream Productions
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Performance Appraisal
SSKI – Corporate Structure:
Serving Institutional Investors –Domestic / International:
• In the Indian securities business since 1922…. • Our institutional Research team is rated as one of the best in the industry • Rated 1st by Asia Money
Research Coverage:
• • • • • Amongst the widest coverages among broking houses in India. Total coverage exceeds some 100 stocks spread over 20 sectors Sector wise investment strategies are in place Stock ideas are presented from time to time, in tune with overall strategy. Active coverage of political developments, economy changes
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Performance Appraisal
The Sharekhan way of life:
• People driven – relationships! • Fleet footed • Growth driven • Values and ethics based
And we have a vision: • To be the best retail broking brand in the Indian Equities market. HOW? • By educating and empowering the individual investor
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Customized Research Reports
Investment advice for a diverse set of investment approaches
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Performance Appraisal
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Performance Appraisal
Serving customers via multiple channels
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Performance Appraisal
The Services Sharekhan offers…
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Performance Appraisal
Performance Appraisal at Sharekhan
Here the work is divided into 2 groups i.e. Back office work and front office work. Back office undertakes office/paper work called as Operations. Front office is called as Relationship Manager i.e. maintaining relation with customers. Thus ‘Performance Appraisal’ plays an important role in Sharekhan. Performance Appraisal is conducted thrice in a year:1. Quarterly basis, 2. Half Yearly basis, 3. Yearly basis And when an employee completes his/her probation period performance appraisal takes place. Performance appraisal is mainly based on targets and KRA i.e. Key Result Area, if the targets are achieved appraisal and incentives are given along with salary.
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Performance Appraisal
Structure of Performance Appraisal for Branch office and Head office: Branch
Cluster Head
Branch Managers
Branch Managers
Employees
Structure at Branch office for Performance Appraisal
Head Office
Head of Department (Top Level Managers) Supervisors Assistant Managers
Employees
Structure at Head office for Performance Appraisal
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Performance Appraisal
Structure of Performance Appraisal in details:1. Brach office: In this performance appraisal interview is taken of Cluster Heads and Branch Managers. Then Cluster Heads takes a performance interview of Branch Managers and Employees while on the other side Branch Manager takes a performance interview of Employees.
2. Head Office: In this performance appraisal interview is taken of Head of Department (HOD’s) Supervisors Assistant Managers. While on the other side Head Department takes a performance interview of Employees.
Sharekhan’s Performance Appraisal is followed by Rating Method:-
While conducting Performance Appraisal employees are been informed about the appraisal process. • Circular is been given in the office by the Human Resource Department. • • • Circular includes day, date, timings and way of performance appraisal. Rating method with the help of questionnaire format is given in the circular by the Human Resource Department. How the rating will be done and what kind of rewards will be given to the employees. 13
Performance Appraisal
• • • •
All the above database is included in the circular Lastly it is closed by head of Departments signature and Top level manager. After all this things during performance appraisal recommendation is taken. Then after conducting performance appraisal forms are been checked by top level managers, Cluster heads and by HR department.
Rating takes place in this way:
Excellent Very Good Good Average Below Average
30%-40% 20% 15% 10% 0%
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Performance Appraisal
The Objectives of Performance Appraisal are:
1. To help better current performances 2. To help in development of the employee. 3. To determine training and development needs. 4. To give employee feedback and counsel them 5. To review performance for salary purposes. Employees across the entire organization are appraised of their performance. This could be done annually, twice a year, periodically depending the need of the organization.
The various kinds of performance appraisal systems are:
1. Personality based performance appraisal system: Here the appraiser rates the personality traits of the person being appraised. This is not in much in organizations as it very subjective and judgmental. It could also be biased and prejudiced. 2. Competence based performance appraisal system: Here the job analysis is used and the employee is appraised for the skills he exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his effectiveness in dealing with them. This enables both the organisation and the employee as to what deficiencies are to be overcome and can be useful in providing training to the employee to better his performance. 3. Result based performance appraisal system: This system concentrates on the final results achieved by the employee irrespective of his personality or deficiencies. This is totally related to the job and concentrates on the end results that are more important to the organization.
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Performance Appraisal
The performance appraisal system has to be transparent and the employee should be taken into full confidence. In many cases employees themselves are given a chance to conduct a self-appraisal. Performance appraisal is a case of joint problem solving by the organization and the employee. However the organization must also take care of future potential and not get bogged down by current performance. Normally the immediate supervisor does the appraisal. Some organizations also have a peer group performance appraisal where colleagues rate the performance. The HR person must also ensure that line managers are properly trained for carrying out the appraisal including interviewing techniques and on how to give feedback. The managers must also be trained to look at the cases objectively outside of their personal opinion of the candidate.
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Performance Appraisal
Goals of Performance Appraisal
These frequently voiced goals of Performance Appraisal programmes underscore importance of such programmes to organizations. • Help supervisors to observe their subordinates more clearly and to do a better coaching job.
•
Motivates employees by providing feedback on how they are doing.
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Provide back up data for management decisions concerning merit increases, transfer, dismissals and so on.
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Improve organization development by identifying people with promotion potential and pin – pointing development need.
•
Establish a research and reference base for personal decisions.
It has been estimated that over three fourths of the companies now have Performance Appraisal programmes. Some critics even suggest that we abandon Performance Appraisal as a lost hope and they point to stores of problems and pitfalls as evidence
But considering the potential of appraisal programmes, the issue is whether to scrap them, rather, than how to make them better. One reason for failures is that we may often select indiscriminately from the wide battery of available Performance Appraisal techniques is best suited to a particular appraisal objectives.
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Performance Appraisal
The most commonly used appraisal techniques include:
1.
Essay appraisal
2.
Graphic rating scale
3.
Field review
4.
Forced – choice rating
5.
Critical incident appraisal
6.
Management by objectives approach
7.
Work – standards approach
8.
Ranking methods
9.
Assessment centers
Each of these has its own combination of strengths and weaknesses and none is able to achieve all the purposes for which management institutes Performance Appraisal System. Nor is any one technique able to evade all the pitfalls. The best anyone can hope to do is to match an appropriate appraisal method to a particular Performance Appraisal goal
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Performance Appraisal
Assessment areas differ from organization to organization and from job to job, according to the requirements of the jobs, the department and the organization.
Some typical assessment areas include:• Quality / accuracy of work
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Quantity of output
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Technical and job related skills
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Attendance and punctuality
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Ability to work as a member of the team.
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Future potential / ability to work in different areas
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Training and development need
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Commitment to safety
•
Dependability
The primary objective of performance appraisal is:
• Performance review
•
Identification of training and development needs
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Performance Appraisal
•
Settings work objectives
•
Employee performance counseling
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Employee career planning
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Employee remuneration / recognition reviews
Possible Program Goals:
• Get managers to understand how others perceive them.
•
Involve workers in developing their own manager.
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Opening more lines of communications (including customers and employees in a formerly top down process).
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A management competency development tool.
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A management evaluation / assessment tool
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A promotion / layoff qualification tool.
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Performance Appraisal Process in Sharekhan
The Performance Appraisal Process consists of six steps. Each step in the process is crucial and is arranged logically. The process shown in the below figure is some what idealized. Many organizations make every effort to approximate the ideal process, resulting in the first-rate appraisal systems. Unfortunately, many others fail to consider one or more of the steps and, therefore, have less - effective appraisal system.
Performance Appraisal
Establishing Performance Standards Communicating Standards to Employees Measuring Actual Performance Comparing Actual Performance with the Standards Set Discussing Actual Performance with the Employee ( Appraisal Interview) Offering Guidance for Improving Performance (Follow – up Measures)
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Performance Appraisal
1. Objectives of Appraisal Objectives of appraisal as stated above include effecting promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct problems. Theses objectives are appropriate as long as the approach in appraisal is individual. Appraisal in future, would assume systems orientations. In the systems approach, the objectives of appraisal stretch beyond the traditional ones. In the systems approach, appraisal aims at improving the performance, instead of merely assessing it. Towards this end, an appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance and social processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how work the work system affects an individual’s. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how the work systems affect an individual’s performance. In order to use a systems approach, managers must learn to appreciate the impact that systems levels factors have on individual performance and subordinates must adjust to lack of competition among individuals. Thus, if a systems approach is going to be successful, the employee must believe that by working towards shared goals, everyone will benefit. Not that the role of the individual is undermined. The individual is responsible for a large percentage of his or her work performance. Employees should not be encouraged to seek organizational reasons for his failures. The identifications of systems obstacles should be used to facilitate development and motivation, not as an excuse to poor performance. The following table displays some of the differences between the traditional approach and the systems-oriented one. 22
Performance Appraisal
PERFORMANCE APPRAISAL SYSTEMS
Guiding value Primary roles Leadership practices Appraisal frequency Degree of formality Reward practices 2. Establish Job Expectations
Traditional Attribution to individual Control, documentation Directional, evaluative Occasional High Individual orientation
Systems Attribution to systems Development, problem solving Facilitative, coaching Frequent Low Group orientation
The second step in the appraisal process is to establish job expectations. This includes informing the employee what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the major duties contained in the job place of formal performance evaluation. 3. Design Appraisal Programme Designing an appraisal programme poses several questions which we need to answers. They are: 1. Formals versus informal appraisal 2. Whose performance is to be assessed? 3. Who are the raters? 4. What problems are encountered? 5. How to solve the problems? 6. What should be evaluated? 7. When to evaluate? 8. What methods of appraisal are to be used?
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Formal V/s Informal
What methods ?
Whose perform ance What are the raters?
When to evaluate ?
Apprais al design
What to evaluate ?
How to solve?
What problem s
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Benefits of Performance Appraisal
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a superior and subordinate to have to “time out” for one – on – one discussion of important work uses that might now otherwise be addressed. Appraisal offers a valuable opportunity to focus on work, activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of this organization is enhanced. The value of this intake and purposeful interaction between employees and employer should not be underestimated.
? Motivation and Satisfaction:
Performance appraisal has profound effect on levels of employee’s motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings even prefer negative recognition in preference to no recognition at all. If nothing else, the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This alone has a positive influence on the individuals’ sense of worth, commitment and belonging. The strength and prevalence of this natural human desire for individual recognition is been overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if more attention were paid to it. Regular performance appraisal, at least, is a good start.
? Training and Development :
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Performance Appraisal
Performance appraisal offers an excellent opportunity – perhaps the best that it will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee’s work performance, the presence or absence of work skills has become very obvious – even to those who habitually reject the idea of training for them! Performance appraisal makes the needs for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations. From the point of view of the organization as a whole consolidated appraisal data form a picture of the overall demand for training. This data is analyzed by variables such as sex, department etc. in this respect, performance appraisal provide a regular and efficient training needs audit for the entire organization.
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Recruitment and Induction:
Appraisal data is used to monitor the success of the organization’s recruitment and induc-
tion practices. For example, how well are the employees performing who were hired in the past two years? Appraisal data is also used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires ( and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving staying steady, or declining.
?
Employee Evaluation:
Though often understated or even denied, evaluation is a legitimate and major objective of
performance appraisal.
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Performance Appraisal
But the need to evaluate (i.e to judge) is an on going source of tension, since evaluative and development priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual. Though organizations have a clear right – some would say a duty – to conduct such evaluations of performance, many still recoil from the idea. To them, the explicit process of judgement can be dehumanizing and demoralizing and a source of anxiety and distress to employees. “It is said that appraisal cannot serve the needs of evaluation and development at the same time; it is one or the other” But there is an acceptable middle ground, where the need to evaluate employees objectively, and the need to encourage and develop them is balanced.
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Performance Appraisal
The Appraisal Interview
Whatever method of appraisal used by an organization, it is crucial to allow for ‘employee feedback’. An interview between the manager and the employee is the main way of achieving this. The interview provides the opportunity to discuss an employees’ performance and explore areas of possible improvements and growth. It also provides an opportunity to identify attitudes and feelings more thoroughly and thus improve communication. Fundamental to the success of the appraisal interview is the relationship between the two participants in the process. The interview may have any of the following purposes ? Record / summary of performance ? Feedback from employee ? Feedback from manager ? Career development ? Suitability for promotion / transfer ? Counseling ? Motivation ? Foster the working relationship The format of the interview will be determined in large by ? The purpose of interview ? Type of appraisal method used ? Organization of the interview form (formal record) The interview is perhaps the most important part of the entire appraisal programme. Unfortunately, interviewers can become overburdened by attempting to discuss too much.
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The interviewer should observe the following points: Initially, emphasize strengths on which employee can build rather than weakness to overcome. ? Avoid suggestions about personal traits to change instead suggest more acceptable ways of performing. ? Concentrate on opportunities for growth that exist within the framework of the employees’ present position. ? Limit plans for growth to a few important items that can be accomplished within a reasonable period of time.
?
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Performance Appraisal
Types of Appraisal Interview
Managers never assume that only one type of appraisal interview in appropriate for every review session. Rather, they should be able to use one or more of the interview types depending on the topic being discussed or the behaviour being appraised. Feedback is necessary to effect improvement in performance, especially when it is inadequate.
Specially, performance interview has three goals:
1. To change behaviour of employees whose performance does not meet organiza-
tional requirements or their own personal goals?
2. To maintain the behaviour of employees who perform in an acceptable manner, and
3. To recognize superior performance behaviours so that they will be continued.
Three distinct types of interview are commonly used ? Tell and sell ? Tell and listen ? Problem solving and mixed.
1. Tell and sell ? specific goals for improvement, if needed. ? tion Has little provision for employee participaIt is also called as directive interview; the interviewer lets assessees know how well they are doing and sells them on merits of setting
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? ? ? ? ?
Generally consists of three stages Manager lets employee know how the latter is doing. The employee’s acceptance of this evaluation is sought. The employee agrees to follow a pre-determined plan for improved job performance. This method does not require much of anyone’s time but is of little use if the improved behaviour does not eventuate.
?
There is no opportunity for employee participation and over time, it is likely that employees will only perform to conform to their manager’s wishes.
?
The role of the supervisor / manager is one of ‘judge’ and ‘jury’. 2. Tell and listen
?
Tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicate the rater’s perceptions.
? ?
It is the most commonly used interview technique. As with “Tell and Sell”, the manager lets the employee know how he or she is doing.
? Communicate strong and weak points of an employee’s job performance. ? The employee has a chance to respond to the assessment and present his/ her views.
? Employee’s feelings of the appraisal are thoroughly explored. ? BOTH views are then considered together, a conclusion reached and a plan for future performance is developed.
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?
This is much more flexible approach, however, the type of reaction provoked may strongly affect the success of the interview
? For example, if the manager’s remarks are perceived as unfair. ? (Or critical) by the employee, defence mechanism and face saving, rather than constructive responses might still be the outcome. ? The “Tell and Listen” method assumes that the opportunity to release frustrated feelings will help reduce or remove them. 3. Problem solving and mixed ? In the problem solving or participative interview, an active and open dialogue is established between the superior and the subordinate. Not only are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem solving interviews. ? Differs markedly from the methods above.
? Although recommended by some, since the objective of appraisal is normally to stimulate growth and development in the employee. ? It is used more widely in ‘counselling’ and is an unstructured approach. ? The skills are consistent with the non-directive procedures of the “Tell and Listen” method in that listening, accepting and responding to feelings are essential. ? However, it goes beyond an interest in the employee’s feelings. ? It seeks to stimulate growth and development in the employee by discussing problems, needs innovations, satisfactions and dissatisfactions encountered since the last appraisal. ? A work – related situation is presented and both the manager and the employee discuss a solution.
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Performance Appraisal
?
The manager assumes the role of a ‘Helper’ or ‘Facilitator’ rather than a judge and emphasis is on the work situation, not the business of the individual.
?
Can lead to a wide range of changes in work practices, patterns of supervision and individual attitudes.
?
Managers need to have the following characteristics
? Be well prepared ? Show trust ? Be active listeners ? Discuss frankly any areas where performance is not up to standard, backing this with specific examples. ? Conversely good performance should be praised, again using specific examples. ? It is also important for the employee not to leave the interview with any issues unsolved. Whatever be the approach followed, the emphasis in the interview should be on counseling and development and not on criticism, witch – hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given will help make the interview successful. Guidelines for effective appraisal interview: • • • • • • • • • Select a good time Minimize interruptions Welcome, set at ease Start with something positive Ask open-ended questions to encourage discussion Listen Manage eye contact and body language Be specific Rate behaviour, not personally 33
Performance Appraisal
• • • • •
Layout development plan Encourages subordinate participation Set mutually agreeable goals for improvement End in a positive, encouraging note Set time for any follow – up meetings.
Plans the interview
Events that should occur before the performance appraisal interview:
- Ask employee to complete an interview or self appraisal form (optional) - Review notes related to employee performance - Review performance expectations and key responsibilities for the position - Rate employee on all applicable criteria - Prepare preliminary employee evaluation for reviewing authority - Plan for specific corrective and/or developmental actions - Write the final appraisal.
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Performance Appraisal
Use of Appraisal Data
The final step in evaluation process is the use of evaluation data. The HR department use this data and information generated through performance evaluation. It may be recollected that the most significant rewards offer to employees are: ? ? ? ? ? ? Money to purchase goods and services required not only for current and future survival, but also for the luxuries modern life has to offer. The opportunity to use innate and learned skills and talents in a productive manner that the individual and his or her managers and co-workers recognize as a valuable. Opportunities to interact with people in a favourable working environment. Opportunities to learn, grow, and make full use of their potential. A sense of performance and stability through the continuing existence of the organization and the job. The opportunity to perform work assignments within an environment that not only protects, but promotes physiological, emotional and psychological health. In one way or another, data and information outputs of a performance appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information is useful in the following areas of HRM: 1. Remuneration administration 2. Validation of selection programmes 3. Employer training and development programmes 4. Promotion, transfer and lay-off decisions 5. Grievance and discipline programmes 6. HR planning
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Elements in the Performance Appraisal Process:
At one stage performance appraisal relied mainly on assessment of personality characteristics. Subordinates were being appraised by their superiors on the extent to which they exhibited characteristics like tact, willingness, enthusiasm, and maturity. Managers are being put in the position of psychologists and required to make subjective ratings without any point of reference except their own opinion. More recent thinking has resulted in an approach which says that there are two important aspects in performance appraisal namely inputs and outputs 1. Inputs: What the individual brings to the job in terms of attributes, behavior, skills and knowledge are inputs. 2. Outputs: The results achieved in terms of outputs or outcomes are referred to as outputs. Expectations are expressed in terms of objectives, standards, targets or competence and appraisal is made on the basis of inputs and outputs.
Methods Used in Appraisal:Three different approaches exist for appraisals. Employees can be appraisal against absolute standards, relative standards and objectives. In cases where absolute standards are used, the employees are not compared with any other person while in the second category of appraisal methods using relative standards, individuals are compared with other individuals. The third approach makes use of objectives. Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of the job.
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When Appraisals should Take Place:Most large organizations hold formal appraisal discussions annually, twice a year. When employees are working on projects, there is an appraisal after each assignment has been completed.
Ensuring that Appraisal is a continuous Process:To ensure that appraisal is not just seen as a once-a-year event to be got over as quickly as possible it is necessary to emphasis the continuing nature of the process on briefing and training. Performance appraisal should not be imposed on managers as something special they have to do. It should be treated as a natural process which all managers carry out. Performance appraisals are an integral part of every organization and if they are properly developed and implemented, they can help the organization achieve its goals by developing productive employees.
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Performance Appraisal and Competitive Advantage
The objectives of performance appraisal, listed, point out the purpose which such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firm's competitive strength. Besides encouraging high levels of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employee's need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following ways (see Fig below)
Strategy and Behavior
Improving Performance
Making correct decisions
Competitive Advantage
Values and Behaviour
Minimizing dissatisfaction and turnover
Ensuring Legal Compliance
Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage?
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• Improving Performance
An effective appraisal system contribute to competitive advantage by improving employee job performance in two ways-by directing employee behaviour towards organizational goals, as was done by the second beekeeper (see opening case), and by monitoring that behaviour to ensure that the goals are met.
•
Making Correct Decisions:
As stated above, appraisal is a critical input in making decisions on such issues as pay
raise, promotion, transfer, training, discharges and completion of probationary periods. Right decision on each of these contributes to competitive strength of an organization. If promotion, for example, is made on performance, the promotee feels motivated to enhance his or her performance. •
Ensuring Legal Compliance:
Promotions made on factors other than performance land up a firm in a legal battle, thus
diverting its focus on non-productive areas, as it happened to Williamson Magar. Organizations minimize costly performance-related litigation by using appraisal systems that give fair and accurate ratings.
•
Minimizing Job Dissatisfaction and Turnover:
Employees tend to become emotional and frustrated if they perceive that the ratings they get are unfair and inaccurate. Such employees find that the efforts they had put in became futile and obviously get de-motivated. Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair and accurate appraisal results in high motivation and increased job satisfaction. An organization having satisfied and motivated employees has an edge over its competitors. 39
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•
Consistency between Organizational Strategy and Behaviour:
Our organisation has a strategy consistent with the behaviour of its employees to realize
its goals. A truism of organizational life is that people engage themselves in behaviours that they perceive are rewarded. As employees want to be rewarded, they tend to occupy themselves more with those activities on which the organization emphasizes. For example, if the focus is on service, employees will behave in ways that will help them in gaining rewards associated with service delivery. If the focus is on cost control, employees will seek to control cost and thus be recognized and rewarded. If the focus is on rewarding productivity, employees will strive for productivity.
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Pitfalls
Obstacles to the success of formal Performance Appraisal programs is to be familiar to most managers, either from painful personal experience or from the growing body of critical literature. Here are the most troublesome and frequently cited drawbacks.
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Performance Appraisal programs demand too much from supervisors. Formal performance
appraisal obliviously requires at least periodic supervisor observation of subordinate’s performance. However, the typical first – line supervisor can hardly know, in a way, just what each of 20, 30 or more subordinates are doing.
•
Standards and ratings tend to vary widely and often. Unfairly, some rates are tough, while
some are lenient. Some departments have highly competent people, others have less competent people. Consequently, employees subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates.
•
Personal values and bias can replace organizational standards. An appraiser may not lack
standards, but the standards he uses are sometimes wrong ones. For example – unfairly low ratings may be given to valued subordinates so they will not be promoted out of the raters department. More often, however, outright bias dictates favored treatment for some employees.
•
Because of lack of communication, employees may not know how they are rated. The stan-
dards by which employees think they are being judged are sometimes different from those their supervisors actually use. No performance appraisal system can be very effective for management
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decisions, organization development, or any other purpose until the people being appraised know what is expected of them and by what criteria they are being judged.
•
Appraisal techniques tend to be used as performance panaceas. If a worker lacks the ability
or has not been given the necessary training for his job, it is either reasonable to try to stimulate adequate performance through performance appraisal, not fair to base salary, dismissal, or other negative decisions on such an appraisal. No appraisal program can substitute for sound selection, placement, and training programs. Poor performance represents someone else’s failure.
•
In many cases, the validity of ratings is reduced by supervisory resistance to making the rat-
ings. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, and below average salary increases, supervisors often take more comfortable way out and give average or above average ratings to inferior performers.
•
Performance Appraisal ratings can boomerang when communicated to employees. Negative
feedback (i.e criticism) not only fails to motivate the typical employee, but also can cause him to perform worse. Only those employees who have a high degree of self-esteem appear to be stimulated by criticism to improve their performance.
•
Performance Appraisal interferes with the more constructive coaching relationship that
should exist between a supervisor and his subordinates. Performance Appraisal interviews tend to emphasize the superior position of the supervisor by placing him in the role of judge, thus
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countering his equality important role of teacher and coach. This is particularly, damaging in organizations that are attempting to maintain a more participative organizational climate.
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Performance Appraisal
Self Appraisal System in Sharekhan
The Performance Appraisal system in Sharekhan is done at three levels. First by the employee itself followed by his superior and then by the reviewing authority. The appraisal process is based on Performance and is subjective in nature. In Self Appraisal, the Appraisee is asked to highlight his best performances and also list the areas where he feels he is not upto the mark. The Appraisee is also asked to highlight problems he’s faced and opportunities he is required to improve his performance. He is also asked to mention any outstanding performance he’s done outside the organisation but for the organization. The Self Appraisal is followed by the appraisal done by the superior (appraiser). This appraisal basically includes analyzing various business dimensions related to financial aspects. It also includes qualitative aspects of business such as attitude, customer service, etc. The appraisal also gives feedback on Key Responsibility Areas (KRA’s), which includes: ? The primary responsibilities assigned to the appraisee and ? Managerial dimensions for operational and non-operational assignments.
Managerial dimensions for operational and non- operational assignments include:
• Job knowledge
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Leadership
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Decision Making
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Administrative skill
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Performance Appraisal
•
Public Relation marketing Skills and
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Integrity and Honesty
The Appraiser gives comments on:
• Conceptual activities
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Emotional Strength
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Responsiveness to corporate concerns
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Willingness to assume Responsibilities
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Creativity and Innovativeness
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Communication Skills
The several assessment of performance is done Operational and Non - operational assignments. This assessment is done by both appraiser and receiving authority.
The operational assignments include:
? Business Dimensions, which has 30 marks,
?
Qualitative Aspects of Business, which has 20 marks,
?
Managerial Dimensions, which has 40 marks and
?
Outstanding Performance, which has 10 marks. 45
Performance Appraisal
Non – Operational assignments include:
? Key Responsibility Areas, which has 50 marks,
?
Managerial Dimensions, which has 40 marks and
?
Outstanding Performance, which has 10 marks.
From the above scores given by the appraiser and reviewing authority. Performance is rated on the scale of:
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Outstanding (80 – 100);
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Good (60 – 79);
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Average (40-59) and
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Below Average (Below 40)
After the information so obtained from the assessment of performance, the company is able to provide training needs and in able to find out the potentiality of the employees. 46
Performance Appraisal
T
he final appraisal is done by the reviewing authority, which includes remarks and com-
ments on the appraisal done.
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Performance Appraisal
Managerial Ethics in Performance Appraisal
Performance appraisal system is effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn, is heavily based on the appraisal system. Appraisal system, to be effective, should possess the following essential characteristics:
Reliability and validity:
Appraisal system provides consistent, reliable and valid information and data, which is used to defend the organization-even in legal challenges. If two appraisers are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. Then the technique satisfies the condition of inter-rater reliability. Appraisals must also satisfy the condition of validity be measuring what they are supposed to measure. For example, if appraisal is made for potential of an employee for promotion, it should supply the information and data relating to potentialities of the employee to take up higher responsibilities and carry on activities at higher level.
Job Relatedness:
The appraisal technique should measure the performance and provide information in Job related activities/areas.
Standardization:
Appraisal forms, procedures, administration of techniques, rating etc. should be standardized as appraisal decisions affect all employees of the group.
Practical Viability:
The techniques should be practically viable to administer, possible to implement and economical regarding cost aspect.
Legal Sanction:
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Performance Appraisal
It should have compliance with the legal provisions concerned of the country.
Training and Appraisers:
Because appraisal is important and sometimes difficult, it would be useful to provide training to appraisers namely insights and ideas on rating, documenting appraisals, and conducting appraisal interviews. Familiarity with rating errors can improve rater performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively.
Open Communication:
Most employees want to know how well they are performing on the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisals period. Once this is known it becomes easy for employees to learn about the yardsticks and, if possible, try to improve their performance in future.
Employee Access to Results:
Employees know the rules of the game. They receive adequate feedback on their performance. If performance appraisals are meant for improving employee’s performance, then withholding appraisals results not serve any purpose. Employees simply could not perform better without having access to this information. Permitting employees to review the results of their appraisal allows them to detect any errors that may have been made. If they disagree with the evaluation, they can even challenge the same through formal channels. It follows then that formal procedures to be developed to enable employees who disagree with appraisal results which are considered to be inaccurate or unfair. They must have the means for pursuing their grievances and having them addressed objectively.
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Performance Appraisal
When management uses it as a whip or fails to understand its limitations, it fails. The key is not which forms or which method is used. Performance appraisal is used primarily to develop employees as valuable resources. Only then it would show promising results.
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Performance Appraisal
Strengths and Weakness of appraisal against Objectives
Strengths:
The strengths of appraising against accomplishment of objectives are almost the same as those of managing by objectives. Both are part of the same process, basic to effective managing and are means of improving the quality of managing. In the area of appraising, there are special and important strengths. Appraising on the basis of performance against verifiable has the great advantage of being operational. Appraisals are not apart from the job that mangers do but are a review of what they actually did as managers. There are always questions of how well a person did; of whether goals were missed or accomplished, and for what reasons; and of how much in the way of goal attainment should be expected. But information about what a person has done, measured against what that individual agreed was a reasonable target, is available. This information furnishes strong presumptions of objectivity and reduces the element of pure judgment in appraisal. Moreover, the appraisal can be carried on in an atmosphere in which superiors cooperatively work with subordinates rather than sitting in judgment of them.
Weakness:
These apply with equal force to appraisal. One of them is that it is entirely possible for persons to meet or miss goals through no fault of their own. Luck often plays a part in performance. For example, a new product’s acceptance may be far beyond expectations, and its success will make a marketing manager look exceptionally good, even though the quality of the marketing program and its implementation might actually be poor. Or an unpredictable cancellation of a major military contract might make the record of a division manager look unsatisfactory. Most evaluators will say that they always take uncontrollable or unexpected factors into account in assessing goal performance, and to a very great extent they do. But it is extremely difficult to do so. In an outstanding sales record, for example, how much can anyone be sure how
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much was due to luck and how much to competence? Outstanding performers are rated highly, at least as long as they perform. Non-performers can hardly escape having a cloud cast over them. With its emphasis on accomplishing operating objectives, the system of appraising against these may overlook needs for individual development. Goal attainment tends to be shortrun in practice. Even if longer-range goals are included, seldom are they so long-range as to allow for adequate long-term development of managers. Managers concerned primarily with results might be driven by the system to take too little time to plan, implement, and follow through with programs required for their development and that of their subordinates. In the other hand, since managing by objectives better visibility to managerial needs, development programs can be better pinpointed. If individual development is to be ensured, however, goals in this area should be specifically set. From an appraisal as well as an operating management point of view, perhaps the greatest deficiency of management by objectives is that it appraises operating performance only. Not only is there the question of luck, mentioned previously, but also there are other factors to appraise, notably an individual’s managerial abilities. This is why an adequate appraisal system must appraise performance as a manager as well as performance in setting and meeting goals.
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Performance Appraisal
CASE STUDY
Appraisal Linked to Annual Increment: LITCO is the name of a small proprietary concern manufacturing plastic buckets of different sizes. The concern is doing good business and workers are paid fair wages. Total strength of employees is \ 85 including three supervisors, one assistant manager and one manager. The proprietor Mr. Shinde is a businessman cum politician but ensures that the business unit operates smoothly and makes reasonably good profit. This business unit started operations in the year 1994. The rules and practices are developed gradually with suitable modifications as and when necessary. The employees of the concern are rated by supervisors by means of graphic scale. The factors to be considered for rating are performance at work, loyalty, dependability, community activity, initiative, regularity, punctuality, potentiality to develop, relations with co-workers and creative ability. The rating factors, method of rating, time of rating, etc. are made clear to workers through notice, circular and departmental meetings. Yearly increment, promotion and annual prizes are based on the performance of workers as per this method. This system was accepted by workers for a period of six years since its introduction in 1996. There was no criticism or opposition to the scheme till 2001. However, in 2002, the situation changed and the whole performance appraisal system became a cause of conflict in the labour-management relations. In the year 2002, five employees were denied annual increment due to their low ratings. They, along with few others, met the owner Mr. Shinde and expressed their dissatisfaction with the rating they have received. They argued that some considerations in the ratings are vague and are unfair to workers. They made reference to "community service" and argue that such service is not a part of their normal job and what they do off - the job is none of the employer's business. They also argued that loyalty and relations with co-workers as considerations for rating are confusing. In addition, they argued that annual increment should not be linked with this performance appraisal. Annual increment should be given to all workers as a reward for year's service and for meeting growing expenditure of workers. Workers and their families are very much affected 53
Performance Appraisal
when yearly increment of Rs. 100 is denied to them. For workers, wage payment is the only source of income and yearly increase in the salary is a source of pleasure to them. They get psychological satisfaction because of such increase. Workers urge Mr. Shinde to be sympathetic in this regard. One worker also hinted that workers may be required to form a union if the injustice in regard to performance appraisal is not removed. This discussion convinced Mr. Shinde and his manager that present rating system was a dangerous source of friction and that its disadvantages out-weighed its advantages. Mr. Shinde (being a politician also) noted indirect threat of union formation in his unit and was cautious in his approach. He preferred dignified retreat. After few days, he announced the decision to delink annual increment with performance appraisal. However, the rating system was given continuation with some modifications. Moreover, the possibility of promotions were rare, the rating system was not likely to create new problems for workers and employer. This is how Mr. Shinde solved the problem relating to performance appraisal tactfully and also peacefully. Workers were happy and their respect for Mr. Shinde also increased to some extent. Questions: (1) (2) (3) Do you feel that annual increment should be based on performance appraisal? What is your opinion about "community activity" as one consideration in rating system? Do you agree with the decision taken by Mr.Shinde on the disputed issue? Is it a practical
decision? (4) Do you feel that too much importance need not be given to performance ap-
praisal in small factories/production units? (5) What are the possible consequences if Mr. Shinde had refused to amend his performance
appraisal method?
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Possible Answers:
(1) At present, annual increment is given in a routine way to all categories of labour force
though management can link it with performance appraisal. Annual increase in the salary has economic, social and psychological justification. Its refusal affects workers and their family members. It also makes workers angry, dissatisfied and non-co-operative. Hence, annual increment should be given to all workers and should not be linked with performance appraisal. (2) "Community Activity" as a consideration in the graphic scale appears to be redundant
for appraisal purpose. This issue is not directly concerned with factory work. Secondly, reliable information on this consideration may not be available. Thirdly, majority of workers are not participating in this activity and naturally their marking will be "below average". Finally, there is opposition to this consideration and may lead to controversy if the management remains adamant on the matter. (3) The decision taken by Mr. Shinde on the issue was wise and practical. Increment
need not be linked with performance as it is not a normal practice. Similarly, minor adjustment in the appraisal system does not defeat its purpose. Omitting one or two considerations from the rating system will not make the system defective. Moreover, considerations which are ambiguous should not be selected for appraisal purpose. Mr. Shinde's decision is a practical one and also useful for cordial industrial relations. (4) Performance appraisal is important and offers many benefits particularly in large organi-
sation which employs huge manpower. However, in small units, workers are limited, chances of promotion are very few and there is limited scope for the use of results of performance appraisal. However, the system should be there as it is one of the rights of the management. Mr.Shinde has continued the system but too much importance is not attached to the system. The system is necessary as it keeps a check on the employees. (5) Mr. Shinde had every right to be firm on the issue of performance appraisal and refuse to
accept the views expressed by workers. However, the possible consequences are likely to be seri55
Performance Appraisal
ous. Here, workers may start an agitation or may not offer necessary co-operation in the production work. They may form a union in order to fight collectively. Outside leadership may also come in the picture. The cordial industrial relations may be replaced by hostile relations. This is as good as inviting new problems. There may be stoppage of production and profitability may go down. Taking strong stand means paying heavy price on minor issue. Mr. Shinde has avoided this situation.
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Annexure Questionnaire
Q. What is the purpose of performance appraisals?
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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?
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Self appraisal or self evaluation is the review of the performance by the employee him-
self. The self evaluation is discussed with the employee and if appropriate, is incorporated in the final rating. Q. Is there any comprehensive formula to calculate the overall rating?
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No, there is no comprehensive formula for doing so. The overall rating is 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?
•
To complete the performance appraisal subjectively and fairly, we consult the previous
supervisor or manager. If this is not possible, we consult the supervisor’s superior to get his views and inputs. Q. How can input/feedback be collected for the appraisal process?
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Performance Appraisal
•
Different input forms are used for taking the feedback from the various sources like the
superior, peers, customers, vendors and the employee himself. All the perspectives thus received is combined in the appropriate manner and to get an overall, complete view of the employees’ performance. Observation is done by the superior to obtain information. Q. What if the employee refuses to agree or/and accept the review?
•
First of all, we ensure that the employee has got a chance to review his completed ap-
praisal form. If the employee refuses to accept his appraisal, we 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 employee’s 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?
•
The Individual performance reviews is kept confidential and is not accessible to other
employees. It is also stored at a safe place with limited access. Outdated reviews is destroyed. The appraisal is kept as a part of the HR records of the employee.
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Section I. SELF ASSESSMENT FORM: ( April – March)
Employee Name :
Key Code & DOJ (dd/mm/yy) Designation
Department:
Location Head of Department
(Please answer all questions in point form. Be as specific as possible. If you need more space to answer, you may use a blank sheet and attach it to this form. ) 1. What were your targets for the last year? List your targets/objectives/performance areas for last year in the left-hand column. Note your actual achievements in the right hand column. Specify whether the objectives set were reached or not. Use this column to also note missed opportunities for the last year, or targets that in your opinion should have been included. Objectives/Targets A. Quantitative Targets B. Non Quantitative Targets 2. What were the factors, if any, for non-achievement of your targets/objectives for last year? For each factor, you may explain details. 1. 3. What, in your opinion, are your strengths that contribute to your effective performance as an individual and your entire department? Actual Achievements 1.
4. What, in your opinion, are your weaknesses and how do they affect your performance?
5. a. Indicate the peer group interactions in which you received positive assistance.
5. b. Indicate where you did not receive such cooperation?
6. Indicate the areas in which you need training that would enhance your performance?
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• • • • •
Organization/Supervisory Skills Communication/Presentation Skills Technology Related Training Technical Skills pertaining your job - be specific
Others - be specific 7. What other assistance do you require from the management to be able to achieve your targets?
8. Outline your targets/objectives for next year? (April 2006-March 2007)Objectives/Targets
Signature of employee:______________ Date __________
Section II. SUPERIOR'S ASSESSMENT
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Employee Name:
Key Code & DOJ (dd/mm/yy) Designation
Department:
Location Head of Department
Date: ____________
1. Evaluate the overall performance of the employee. 2. What, in your opinion, are the areas of strength for the employee and how have they contributed to performance? 3. Outline the areas that require future improvements. 4. What are your recommendations for the employee? (For eg. Job Rotation, Training Needs, other actions.) 5. Modification to Targets/Objectives set by employee for April 2006 - March 2007.. 6. a. Overall Ranking of Employee 1 2 3 4 5 6. b. Relative Ranking of Employee as compared to his/her peers 1 2 3 4 5 (Use the following rating scale to rate the employees: Rating Scale 1-5. 1: Excellent, 2: Very Good, 3: Good, 4: Average, 5: Below Average) Signature of superior: ___________
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Guidelines for Appraisers:
1. PURPOSE: The basic purpose of appraisal apart from compensation is to identify:
• • •
Employees with high potential Training needs Developmental needs for career progression
Another purpose of the appraisal exercise is to motivate employees to improve their performance. Review is written and delivered in a way that supports these outcomes. 2. HOW TO CONDUCT APPRAISALS: 2.1 Rapport Building:
• •
Give an adequate advance notice of at least a day so that there is no element of surprise. Let the discussion be in a place where there is no disturbance. Please do not receive any telephone calls as it would divert the attention. Spend at least 20 to 30 minutes with each employee. Create a proper climate for discussion so that the employee is relaxed and at ease and is free of nervousness, anxiety and tension. Ask the employee to comment on his performance first. It is better to start discussions with the employee’s strengths and achievements. Encourage discussion on points of disagreement and check for mutual understanding so that there is a “win-win” situation. 2.2 Nuts and Bolts of providing Feedback:
• •
• • •
•
Feedback should be specific and be clearly aimed at identifying strengths and development needs. 62
Performance Appraisal
• •
Provide positive feedback first. Feedback should be descriptive and not evaluative. It should not be affected by recent events. It should consider the full period of appraisal in toto. Feedback should focus on behavior and not on the person. Don’t criticize the person per se but criticize behavior. Feedback should reinforce positive behavior and actions. Feedback should not be based on hearsay, but be based on our professional interactions. Feedback should be based on data (so as to be more objective) and not on impressions. Feedback should be based on traits or qualities which can be modified and not on traits or personality factors which cannot be modified. E.g.: poor eyesight, stammering etc. One should ensure that while giving feedback, person’s self-esteem should not get diluted. Dignity and respect of each employee must be maintained.. “Process of giving feedback should be like an expert surgeon who performs successful surgery with least loss of blood.” 2.3 Consolidation:
•
• • • •
•
•
•
After the discussion is over, kindly record your comments on Section II of the Assessment Form
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Guidelines for Appraisee (Employees):
I) The following guidelines will make it easier to complete Step 1.
•
While filling up the form, please provide a complete and a balanced assessment of your Do not get influenced by the recent events, but review the entire appraisal period. After filling up the ‘Self Assessment Form – Section I’, make sure to schedule a perforThe purpose of this review discussion is to have a dialogue about your strengths and ar-
performance.
• •
mance review discussion with your HOD/RD.
•
eas for improvement. II) The following guidelines will help you to make the appraisal discussions more productive:
• • • •
Play an active role. Express personal commitment to process. As a matured professional, solicit feedback proactively to improve future performance. Please take negative feedback (if any) in the right spirit. Your HODs will give you feedback, both positive and negative. Listen carefully and Take advantage of your superior’s experience by asking for suggestions they have for Use the feedback to plan out the action steps for the coming year. As a part of self-development effort, please work out a time-bound improvement plan so Be prepared to describe to your HOD/RD any ideal opportunities that will allow you to Appraisal exercise is the best opportunity to spend quality time with your boss. Please Take the feedback in the right spirit. “Feedback is the breakfast of champions.”
don’t be defensive to negative feedback as it is meant to improve your performance.
•
your improvement.
• •
that the same areas of improvement do not reappear next year.
•
take up greater challenges and additional responsibilities.
•
feel free to share your concerns, issues and anxiety.
•
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Findings
• In the whole appraisal system, often superiors assume the role judges. In contrast the aim is to develop employees; managers need to be counselors, helpers and teachers. • Maximum employees in the organisation were of the opinion that the performance appraisal is a positive step taken by the organization to help them to improve their own performance. • Employees were hopeful that after the performance appraisal is over they will be properly rewarded for their work and that it was a way to ensure that their efforts don’t go unnoticed. • The employees showed eagerness to learn from their mistakes which they hoped to rectify and perform better.
•
Although the employees believe that performance appraisals are their betterment, in the beginning they had doubts in their minds about issue of bias being a factor in the process of evaluation.
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BIBLIOGRAPHY Company Visited:-
Sharekhan Ltd. Lower Parel (W)
Website: -
www.sharekhan.com
Referred Online Book:Ten Minute Guide to Performance Appraisals by Dale Furtwengler -
http://safari.java.net
Books referred: ? Human Resource and Personnel Management by Tata McGraw Hill Publishing Company Limited. K Aswathappa
? Organizational Behaviour. Stephen Robbins
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doc_996823353.doc
Introduction of Performance Appraisal
Meaning and definition of performance appraisal:
The meaning of the word “appraisal” is “to fix a price or value for something”. This is used in finance in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly performance appraisal is a process in which one values the employee contribution and worth to the organization. In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
DEFINITIONS OF PERFORMANCE APPRAISAL: A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is
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Performance Appraisal
probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
So the question arises what to do?
1.
Firstly the organization must realize that pay related performance appraisal is likely to be
effective only where jobs are designed in such a way that allows individual performance to be measured. Thus in situation characterized by high interaction among jobs in achieving results, group-related pay systems may be more appropriate. Thus before establishing company policies on the matter, it may be good idea to read about alternative methods for rewarding good performance the gain sharing or tying rewards to learn performance or the company performance rather than only to individual performance.
Job Analysis
Performance Standards
Translate job requirements into levels of acceptable or unacceptable performance
Performance Appraisal
Describes the jobrelevant strengths and weaknesses of each individual
Describes work and personnel requirement of a particular job
2.
Sometimes a combination of reward systems works much better and has fewer nasty side
effects than a single way of rewarding performance. 2
Performance Appraisal
The design of Employee Performance Appraisal and Development Plan thus formed would assist in evaluating employee performance and identifying their potential and guide in developing a plan to improve his/her performance as also to prepare him/her for greater responsibilities in case of promotions and transfers. It should be filled carefully, thoughtfully and objectively. Before an appraisal is made, the superior should ensure that he/she and the employee are in agreement concerning responsibilities, for result expected and what constitutes satisfactory performance. The whole approach is a positive one its purpose is improvement of individual’s ability and performance.
Introduction of Sharekhan
Sharekhan is the retail broking arm of SSKI, an organization with more than eight decades of trust & credibility in the stock market. • • • • Amongst pioneers of investment research in the Indian market In 1984 ventured into Institutional Broking & Corporate Finance. Leading domestic player in Indian institutional business Over US$ 1 billion of private equity deals
Sharekhan:
• Among the top 3 branded retail service providers (Rs 650 crs avg daily vol- Apr-Dec’04) • No. 2 player in online business • Largest network of branded broking outlets in the country servicing 81,000 clients
SSKI Group Companies:
• • • SSKI Investor Services Ltd (Sharekhan) S.S. Kantilal Ishwarlal Securities SSKI Corporate Finance 3
Performance Appraisal
•
Idream Productions
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SSKI – Corporate Structure:
Serving Institutional Investors –Domestic / International:
• In the Indian securities business since 1922…. • Our institutional Research team is rated as one of the best in the industry • Rated 1st by Asia Money
Research Coverage:
• • • • • Amongst the widest coverages among broking houses in India. Total coverage exceeds some 100 stocks spread over 20 sectors Sector wise investment strategies are in place Stock ideas are presented from time to time, in tune with overall strategy. Active coverage of political developments, economy changes
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The Sharekhan way of life:
• People driven – relationships! • Fleet footed • Growth driven • Values and ethics based
And we have a vision: • To be the best retail broking brand in the Indian Equities market. HOW? • By educating and empowering the individual investor
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Customized Research Reports
Investment advice for a diverse set of investment approaches
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Serving customers via multiple channels
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The Services Sharekhan offers…
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Performance Appraisal at Sharekhan
Here the work is divided into 2 groups i.e. Back office work and front office work. Back office undertakes office/paper work called as Operations. Front office is called as Relationship Manager i.e. maintaining relation with customers. Thus ‘Performance Appraisal’ plays an important role in Sharekhan. Performance Appraisal is conducted thrice in a year:1. Quarterly basis, 2. Half Yearly basis, 3. Yearly basis And when an employee completes his/her probation period performance appraisal takes place. Performance appraisal is mainly based on targets and KRA i.e. Key Result Area, if the targets are achieved appraisal and incentives are given along with salary.
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Structure of Performance Appraisal for Branch office and Head office: Branch
Cluster Head
Branch Managers
Branch Managers
Employees
Structure at Branch office for Performance Appraisal
Head Office
Head of Department (Top Level Managers) Supervisors Assistant Managers
Employees
Structure at Head office for Performance Appraisal
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Structure of Performance Appraisal in details:1. Brach office: In this performance appraisal interview is taken of Cluster Heads and Branch Managers. Then Cluster Heads takes a performance interview of Branch Managers and Employees while on the other side Branch Manager takes a performance interview of Employees.
2. Head Office: In this performance appraisal interview is taken of Head of Department (HOD’s) Supervisors Assistant Managers. While on the other side Head Department takes a performance interview of Employees.
Sharekhan’s Performance Appraisal is followed by Rating Method:-
While conducting Performance Appraisal employees are been informed about the appraisal process. • Circular is been given in the office by the Human Resource Department. • • • Circular includes day, date, timings and way of performance appraisal. Rating method with the help of questionnaire format is given in the circular by the Human Resource Department. How the rating will be done and what kind of rewards will be given to the employees. 13
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• • • •
All the above database is included in the circular Lastly it is closed by head of Departments signature and Top level manager. After all this things during performance appraisal recommendation is taken. Then after conducting performance appraisal forms are been checked by top level managers, Cluster heads and by HR department.
Rating takes place in this way:
Excellent Very Good Good Average Below Average
30%-40% 20% 15% 10% 0%
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The Objectives of Performance Appraisal are:
1. To help better current performances 2. To help in development of the employee. 3. To determine training and development needs. 4. To give employee feedback and counsel them 5. To review performance for salary purposes. Employees across the entire organization are appraised of their performance. This could be done annually, twice a year, periodically depending the need of the organization.
The various kinds of performance appraisal systems are:
1. Personality based performance appraisal system: Here the appraiser rates the personality traits of the person being appraised. This is not in much in organizations as it very subjective and judgmental. It could also be biased and prejudiced. 2. Competence based performance appraisal system: Here the job analysis is used and the employee is appraised for the skills he exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his effectiveness in dealing with them. This enables both the organisation and the employee as to what deficiencies are to be overcome and can be useful in providing training to the employee to better his performance. 3. Result based performance appraisal system: This system concentrates on the final results achieved by the employee irrespective of his personality or deficiencies. This is totally related to the job and concentrates on the end results that are more important to the organization.
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Performance Appraisal
The performance appraisal system has to be transparent and the employee should be taken into full confidence. In many cases employees themselves are given a chance to conduct a self-appraisal. Performance appraisal is a case of joint problem solving by the organization and the employee. However the organization must also take care of future potential and not get bogged down by current performance. Normally the immediate supervisor does the appraisal. Some organizations also have a peer group performance appraisal where colleagues rate the performance. The HR person must also ensure that line managers are properly trained for carrying out the appraisal including interviewing techniques and on how to give feedback. The managers must also be trained to look at the cases objectively outside of their personal opinion of the candidate.
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Performance Appraisal
Goals of Performance Appraisal
These frequently voiced goals of Performance Appraisal programmes underscore importance of such programmes to organizations. • Help supervisors to observe their subordinates more clearly and to do a better coaching job.
•
Motivates employees by providing feedback on how they are doing.
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Provide back up data for management decisions concerning merit increases, transfer, dismissals and so on.
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Improve organization development by identifying people with promotion potential and pin – pointing development need.
•
Establish a research and reference base for personal decisions.
It has been estimated that over three fourths of the companies now have Performance Appraisal programmes. Some critics even suggest that we abandon Performance Appraisal as a lost hope and they point to stores of problems and pitfalls as evidence
But considering the potential of appraisal programmes, the issue is whether to scrap them, rather, than how to make them better. One reason for failures is that we may often select indiscriminately from the wide battery of available Performance Appraisal techniques is best suited to a particular appraisal objectives.
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Performance Appraisal
The most commonly used appraisal techniques include:
1.
Essay appraisal
2.
Graphic rating scale
3.
Field review
4.
Forced – choice rating
5.
Critical incident appraisal
6.
Management by objectives approach
7.
Work – standards approach
8.
Ranking methods
9.
Assessment centers
Each of these has its own combination of strengths and weaknesses and none is able to achieve all the purposes for which management institutes Performance Appraisal System. Nor is any one technique able to evade all the pitfalls. The best anyone can hope to do is to match an appropriate appraisal method to a particular Performance Appraisal goal
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Performance Appraisal
Assessment areas differ from organization to organization and from job to job, according to the requirements of the jobs, the department and the organization.
Some typical assessment areas include:• Quality / accuracy of work
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Quantity of output
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Technical and job related skills
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Attendance and punctuality
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Ability to work as a member of the team.
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Future potential / ability to work in different areas
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Training and development need
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Commitment to safety
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Dependability
The primary objective of performance appraisal is:
• Performance review
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Identification of training and development needs
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Performance Appraisal
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Settings work objectives
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Employee performance counseling
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Employee career planning
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Employee remuneration / recognition reviews
Possible Program Goals:
• Get managers to understand how others perceive them.
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Involve workers in developing their own manager.
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Opening more lines of communications (including customers and employees in a formerly top down process).
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A management competency development tool.
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A management evaluation / assessment tool
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A promotion / layoff qualification tool.
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Performance Appraisal
Performance Appraisal Process in Sharekhan
The Performance Appraisal Process consists of six steps. Each step in the process is crucial and is arranged logically. The process shown in the below figure is some what idealized. Many organizations make every effort to approximate the ideal process, resulting in the first-rate appraisal systems. Unfortunately, many others fail to consider one or more of the steps and, therefore, have less - effective appraisal system.
Performance Appraisal
Establishing Performance Standards Communicating Standards to Employees Measuring Actual Performance Comparing Actual Performance with the Standards Set Discussing Actual Performance with the Employee ( Appraisal Interview) Offering Guidance for Improving Performance (Follow – up Measures)
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Performance Appraisal
1. Objectives of Appraisal Objectives of appraisal as stated above include effecting promotions and transfers, assessing training needs, awarding pay increases, and the like. The emphasis in all these is to correct problems. Theses objectives are appropriate as long as the approach in appraisal is individual. Appraisal in future, would assume systems orientations. In the systems approach, the objectives of appraisal stretch beyond the traditional ones. In the systems approach, appraisal aims at improving the performance, instead of merely assessing it. Towards this end, an appraisal system seeks to evaluate opportunity factors. Opportunity factors include the physical environment such as noise, ventilation and lightings, available resources such as human and computer assistance and social processes such as leadership effectiveness. These opportunity variables are more important than individual abilities in determining work performance. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how work the work system affects an individual’s. In the systems approach the emphasis is not on individual assessment and rewards or punishments. But it is on how the work systems affect an individual’s performance. In order to use a systems approach, managers must learn to appreciate the impact that systems levels factors have on individual performance and subordinates must adjust to lack of competition among individuals. Thus, if a systems approach is going to be successful, the employee must believe that by working towards shared goals, everyone will benefit. Not that the role of the individual is undermined. The individual is responsible for a large percentage of his or her work performance. Employees should not be encouraged to seek organizational reasons for his failures. The identifications of systems obstacles should be used to facilitate development and motivation, not as an excuse to poor performance. The following table displays some of the differences between the traditional approach and the systems-oriented one. 22
Performance Appraisal
PERFORMANCE APPRAISAL SYSTEMS
Guiding value Primary roles Leadership practices Appraisal frequency Degree of formality Reward practices 2. Establish Job Expectations
Traditional Attribution to individual Control, documentation Directional, evaluative Occasional High Individual orientation
Systems Attribution to systems Development, problem solving Facilitative, coaching Frequent Low Group orientation
The second step in the appraisal process is to establish job expectations. This includes informing the employee what is expected of him or her on the job. Normally, a discussion is held with his or her superior to review the major duties contained in the job place of formal performance evaluation. 3. Design Appraisal Programme Designing an appraisal programme poses several questions which we need to answers. They are: 1. Formals versus informal appraisal 2. Whose performance is to be assessed? 3. Who are the raters? 4. What problems are encountered? 5. How to solve the problems? 6. What should be evaluated? 7. When to evaluate? 8. What methods of appraisal are to be used?
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Performance Appraisal
Formal V/s Informal
What methods ?
Whose perform ance What are the raters?
When to evaluate ?
Apprais al design
What to evaluate ?
How to solve?
What problem s
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Performance Appraisal
Benefits of Performance Appraisal
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a superior and subordinate to have to “time out” for one – on – one discussion of important work uses that might now otherwise be addressed. Appraisal offers a valuable opportunity to focus on work, activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of this organization is enhanced. The value of this intake and purposeful interaction between employees and employer should not be underestimated.
? Motivation and Satisfaction:
Performance appraisal has profound effect on levels of employee’s motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings even prefer negative recognition in preference to no recognition at all. If nothing else, the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This alone has a positive influence on the individuals’ sense of worth, commitment and belonging. The strength and prevalence of this natural human desire for individual recognition is been overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if more attention were paid to it. Regular performance appraisal, at least, is a good start.
? Training and Development :
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Performance Appraisal
Performance appraisal offers an excellent opportunity – perhaps the best that it will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee’s work performance, the presence or absence of work skills has become very obvious – even to those who habitually reject the idea of training for them! Performance appraisal makes the needs for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations. From the point of view of the organization as a whole consolidated appraisal data form a picture of the overall demand for training. This data is analyzed by variables such as sex, department etc. in this respect, performance appraisal provide a regular and efficient training needs audit for the entire organization.
?
Recruitment and Induction:
Appraisal data is used to monitor the success of the organization’s recruitment and induc-
tion practices. For example, how well are the employees performing who were hired in the past two years? Appraisal data is also used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires ( and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving staying steady, or declining.
?
Employee Evaluation:
Though often understated or even denied, evaluation is a legitimate and major objective of
performance appraisal.
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Performance Appraisal
But the need to evaluate (i.e to judge) is an on going source of tension, since evaluative and development priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual. Though organizations have a clear right – some would say a duty – to conduct such evaluations of performance, many still recoil from the idea. To them, the explicit process of judgement can be dehumanizing and demoralizing and a source of anxiety and distress to employees. “It is said that appraisal cannot serve the needs of evaluation and development at the same time; it is one or the other” But there is an acceptable middle ground, where the need to evaluate employees objectively, and the need to encourage and develop them is balanced.
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Performance Appraisal
The Appraisal Interview
Whatever method of appraisal used by an organization, it is crucial to allow for ‘employee feedback’. An interview between the manager and the employee is the main way of achieving this. The interview provides the opportunity to discuss an employees’ performance and explore areas of possible improvements and growth. It also provides an opportunity to identify attitudes and feelings more thoroughly and thus improve communication. Fundamental to the success of the appraisal interview is the relationship between the two participants in the process. The interview may have any of the following purposes ? Record / summary of performance ? Feedback from employee ? Feedback from manager ? Career development ? Suitability for promotion / transfer ? Counseling ? Motivation ? Foster the working relationship The format of the interview will be determined in large by ? The purpose of interview ? Type of appraisal method used ? Organization of the interview form (formal record) The interview is perhaps the most important part of the entire appraisal programme. Unfortunately, interviewers can become overburdened by attempting to discuss too much.
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Performance Appraisal
The interviewer should observe the following points: Initially, emphasize strengths on which employee can build rather than weakness to overcome. ? Avoid suggestions about personal traits to change instead suggest more acceptable ways of performing. ? Concentrate on opportunities for growth that exist within the framework of the employees’ present position. ? Limit plans for growth to a few important items that can be accomplished within a reasonable period of time.
?
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Performance Appraisal
Types of Appraisal Interview
Managers never assume that only one type of appraisal interview in appropriate for every review session. Rather, they should be able to use one or more of the interview types depending on the topic being discussed or the behaviour being appraised. Feedback is necessary to effect improvement in performance, especially when it is inadequate.
Specially, performance interview has three goals:
1. To change behaviour of employees whose performance does not meet organiza-
tional requirements or their own personal goals?
2. To maintain the behaviour of employees who perform in an acceptable manner, and
3. To recognize superior performance behaviours so that they will be continued.
Three distinct types of interview are commonly used ? Tell and sell ? Tell and listen ? Problem solving and mixed.
1. Tell and sell ? specific goals for improvement, if needed. ? tion Has little provision for employee participaIt is also called as directive interview; the interviewer lets assessees know how well they are doing and sells them on merits of setting
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Performance Appraisal
? ? ? ? ?
Generally consists of three stages Manager lets employee know how the latter is doing. The employee’s acceptance of this evaluation is sought. The employee agrees to follow a pre-determined plan for improved job performance. This method does not require much of anyone’s time but is of little use if the improved behaviour does not eventuate.
?
There is no opportunity for employee participation and over time, it is likely that employees will only perform to conform to their manager’s wishes.
?
The role of the supervisor / manager is one of ‘judge’ and ‘jury’. 2. Tell and listen
?
Tell and listen interview provides the subordinates with chances to participate and establish a dialogue with their superiors. Its purpose is to communicate the rater’s perceptions.
? ?
It is the most commonly used interview technique. As with “Tell and Sell”, the manager lets the employee know how he or she is doing.
? Communicate strong and weak points of an employee’s job performance. ? The employee has a chance to respond to the assessment and present his/ her views.
? Employee’s feelings of the appraisal are thoroughly explored. ? BOTH views are then considered together, a conclusion reached and a plan for future performance is developed.
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Performance Appraisal
?
This is much more flexible approach, however, the type of reaction provoked may strongly affect the success of the interview
? For example, if the manager’s remarks are perceived as unfair. ? (Or critical) by the employee, defence mechanism and face saving, rather than constructive responses might still be the outcome. ? The “Tell and Listen” method assumes that the opportunity to release frustrated feelings will help reduce or remove them. 3. Problem solving and mixed ? In the problem solving or participative interview, an active and open dialogue is established between the superior and the subordinate. Not only are perceptions shared, but also solutions to problems are presented, discussed, and sought. Mixed interview is a combination of tell and sell and problem solving interviews. ? Differs markedly from the methods above.
? Although recommended by some, since the objective of appraisal is normally to stimulate growth and development in the employee. ? It is used more widely in ‘counselling’ and is an unstructured approach. ? The skills are consistent with the non-directive procedures of the “Tell and Listen” method in that listening, accepting and responding to feelings are essential. ? However, it goes beyond an interest in the employee’s feelings. ? It seeks to stimulate growth and development in the employee by discussing problems, needs innovations, satisfactions and dissatisfactions encountered since the last appraisal. ? A work – related situation is presented and both the manager and the employee discuss a solution.
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Performance Appraisal
?
The manager assumes the role of a ‘Helper’ or ‘Facilitator’ rather than a judge and emphasis is on the work situation, not the business of the individual.
?
Can lead to a wide range of changes in work practices, patterns of supervision and individual attitudes.
?
Managers need to have the following characteristics
? Be well prepared ? Show trust ? Be active listeners ? Discuss frankly any areas where performance is not up to standard, backing this with specific examples. ? Conversely good performance should be praised, again using specific examples. ? It is also important for the employee not to leave the interview with any issues unsolved. Whatever be the approach followed, the emphasis in the interview should be on counseling and development and not on criticism, witch – hunting and buck passing. Because of the significance of appraisal interview, every effort must be made to make it effective. Guidelines given will help make the interview successful. Guidelines for effective appraisal interview: • • • • • • • • • Select a good time Minimize interruptions Welcome, set at ease Start with something positive Ask open-ended questions to encourage discussion Listen Manage eye contact and body language Be specific Rate behaviour, not personally 33
Performance Appraisal
• • • • •
Layout development plan Encourages subordinate participation Set mutually agreeable goals for improvement End in a positive, encouraging note Set time for any follow – up meetings.
Plans the interview
Events that should occur before the performance appraisal interview:
- Ask employee to complete an interview or self appraisal form (optional) - Review notes related to employee performance - Review performance expectations and key responsibilities for the position - Rate employee on all applicable criteria - Prepare preliminary employee evaluation for reviewing authority - Plan for specific corrective and/or developmental actions - Write the final appraisal.
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Performance Appraisal
Use of Appraisal Data
The final step in evaluation process is the use of evaluation data. The HR department use this data and information generated through performance evaluation. It may be recollected that the most significant rewards offer to employees are: ? ? ? ? ? ? Money to purchase goods and services required not only for current and future survival, but also for the luxuries modern life has to offer. The opportunity to use innate and learned skills and talents in a productive manner that the individual and his or her managers and co-workers recognize as a valuable. Opportunities to interact with people in a favourable working environment. Opportunities to learn, grow, and make full use of their potential. A sense of performance and stability through the continuing existence of the organization and the job. The opportunity to perform work assignments within an environment that not only protects, but promotes physiological, emotional and psychological health. In one way or another, data and information outputs of a performance appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information is useful in the following areas of HRM: 1. Remuneration administration 2. Validation of selection programmes 3. Employer training and development programmes 4. Promotion, transfer and lay-off decisions 5. Grievance and discipline programmes 6. HR planning
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Performance Appraisal
Elements in the Performance Appraisal Process:
At one stage performance appraisal relied mainly on assessment of personality characteristics. Subordinates were being appraised by their superiors on the extent to which they exhibited characteristics like tact, willingness, enthusiasm, and maturity. Managers are being put in the position of psychologists and required to make subjective ratings without any point of reference except their own opinion. More recent thinking has resulted in an approach which says that there are two important aspects in performance appraisal namely inputs and outputs 1. Inputs: What the individual brings to the job in terms of attributes, behavior, skills and knowledge are inputs. 2. Outputs: The results achieved in terms of outputs or outcomes are referred to as outputs. Expectations are expressed in terms of objectives, standards, targets or competence and appraisal is made on the basis of inputs and outputs.
Methods Used in Appraisal:Three different approaches exist for appraisals. Employees can be appraisal against absolute standards, relative standards and objectives. In cases where absolute standards are used, the employees are not compared with any other person while in the second category of appraisal methods using relative standards, individuals are compared with other individuals. The third approach makes use of objectives. Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of the job.
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Performance Appraisal
When Appraisals should Take Place:Most large organizations hold formal appraisal discussions annually, twice a year. When employees are working on projects, there is an appraisal after each assignment has been completed.
Ensuring that Appraisal is a continuous Process:To ensure that appraisal is not just seen as a once-a-year event to be got over as quickly as possible it is necessary to emphasis the continuing nature of the process on briefing and training. Performance appraisal should not be imposed on managers as something special they have to do. It should be treated as a natural process which all managers carry out. Performance appraisals are an integral part of every organization and if they are properly developed and implemented, they can help the organization achieve its goals by developing productive employees.
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Performance Appraisal
Performance Appraisal and Competitive Advantage
The objectives of performance appraisal, listed, point out the purpose which such an exercise seeks to meet. What needs emphasis is that performance evaluation contributes to firm's competitive strength. Besides encouraging high levels of performance, the evaluation system helps identify employees with potential, reward performance equitably and determine employee's need for training. Specifically, performance appraisal helps an organization gain competitive edge in the following ways (see Fig below)
Strategy and Behavior
Improving Performance
Making correct decisions
Competitive Advantage
Values and Behaviour
Minimizing dissatisfaction and turnover
Ensuring Legal Compliance
Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage?
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Performance Appraisal
• Improving Performance
An effective appraisal system contribute to competitive advantage by improving employee job performance in two ways-by directing employee behaviour towards organizational goals, as was done by the second beekeeper (see opening case), and by monitoring that behaviour to ensure that the goals are met.
•
Making Correct Decisions:
As stated above, appraisal is a critical input in making decisions on such issues as pay
raise, promotion, transfer, training, discharges and completion of probationary periods. Right decision on each of these contributes to competitive strength of an organization. If promotion, for example, is made on performance, the promotee feels motivated to enhance his or her performance. •
Ensuring Legal Compliance:
Promotions made on factors other than performance land up a firm in a legal battle, thus
diverting its focus on non-productive areas, as it happened to Williamson Magar. Organizations minimize costly performance-related litigation by using appraisal systems that give fair and accurate ratings.
•
Minimizing Job Dissatisfaction and Turnover:
Employees tend to become emotional and frustrated if they perceive that the ratings they get are unfair and inaccurate. Such employees find that the efforts they had put in became futile and obviously get de-motivated. Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is increased turnover. Fair and accurate appraisal results in high motivation and increased job satisfaction. An organization having satisfied and motivated employees has an edge over its competitors. 39
Performance Appraisal
•
Consistency between Organizational Strategy and Behaviour:
Our organisation has a strategy consistent with the behaviour of its employees to realize
its goals. A truism of organizational life is that people engage themselves in behaviours that they perceive are rewarded. As employees want to be rewarded, they tend to occupy themselves more with those activities on which the organization emphasizes. For example, if the focus is on service, employees will behave in ways that will help them in gaining rewards associated with service delivery. If the focus is on cost control, employees will seek to control cost and thus be recognized and rewarded. If the focus is on rewarding productivity, employees will strive for productivity.
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Performance Appraisal
Pitfalls
Obstacles to the success of formal Performance Appraisal programs is to be familiar to most managers, either from painful personal experience or from the growing body of critical literature. Here are the most troublesome and frequently cited drawbacks.
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Performance Appraisal programs demand too much from supervisors. Formal performance
appraisal obliviously requires at least periodic supervisor observation of subordinate’s performance. However, the typical first – line supervisor can hardly know, in a way, just what each of 20, 30 or more subordinates are doing.
•
Standards and ratings tend to vary widely and often. Unfairly, some rates are tough, while
some are lenient. Some departments have highly competent people, others have less competent people. Consequently, employees subject to less competition or lenient ratings can receive higher appraisals than equally competent or superior associates.
•
Personal values and bias can replace organizational standards. An appraiser may not lack
standards, but the standards he uses are sometimes wrong ones. For example – unfairly low ratings may be given to valued subordinates so they will not be promoted out of the raters department. More often, however, outright bias dictates favored treatment for some employees.
•
Because of lack of communication, employees may not know how they are rated. The stan-
dards by which employees think they are being judged are sometimes different from those their supervisors actually use. No performance appraisal system can be very effective for management
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Performance Appraisal
decisions, organization development, or any other purpose until the people being appraised know what is expected of them and by what criteria they are being judged.
•
Appraisal techniques tend to be used as performance panaceas. If a worker lacks the ability
or has not been given the necessary training for his job, it is either reasonable to try to stimulate adequate performance through performance appraisal, not fair to base salary, dismissal, or other negative decisions on such an appraisal. No appraisal program can substitute for sound selection, placement, and training programs. Poor performance represents someone else’s failure.
•
In many cases, the validity of ratings is reduced by supervisory resistance to making the rat-
ings. Rather than confront their less effective subordinates with negative ratings, negative feedback in appraisal interviews, and below average salary increases, supervisors often take more comfortable way out and give average or above average ratings to inferior performers.
•
Performance Appraisal ratings can boomerang when communicated to employees. Negative
feedback (i.e criticism) not only fails to motivate the typical employee, but also can cause him to perform worse. Only those employees who have a high degree of self-esteem appear to be stimulated by criticism to improve their performance.
•
Performance Appraisal interferes with the more constructive coaching relationship that
should exist between a supervisor and his subordinates. Performance Appraisal interviews tend to emphasize the superior position of the supervisor by placing him in the role of judge, thus
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Performance Appraisal
countering his equality important role of teacher and coach. This is particularly, damaging in organizations that are attempting to maintain a more participative organizational climate.
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Performance Appraisal
Self Appraisal System in Sharekhan
The Performance Appraisal system in Sharekhan is done at three levels. First by the employee itself followed by his superior and then by the reviewing authority. The appraisal process is based on Performance and is subjective in nature. In Self Appraisal, the Appraisee is asked to highlight his best performances and also list the areas where he feels he is not upto the mark. The Appraisee is also asked to highlight problems he’s faced and opportunities he is required to improve his performance. He is also asked to mention any outstanding performance he’s done outside the organisation but for the organization. The Self Appraisal is followed by the appraisal done by the superior (appraiser). This appraisal basically includes analyzing various business dimensions related to financial aspects. It also includes qualitative aspects of business such as attitude, customer service, etc. The appraisal also gives feedback on Key Responsibility Areas (KRA’s), which includes: ? The primary responsibilities assigned to the appraisee and ? Managerial dimensions for operational and non-operational assignments.
Managerial dimensions for operational and non- operational assignments include:
• Job knowledge
•
Leadership
•
Decision Making
•
Administrative skill
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Performance Appraisal
•
Public Relation marketing Skills and
•
Integrity and Honesty
The Appraiser gives comments on:
• Conceptual activities
•
Emotional Strength
•
Responsiveness to corporate concerns
•
Willingness to assume Responsibilities
•
Creativity and Innovativeness
•
Communication Skills
The several assessment of performance is done Operational and Non - operational assignments. This assessment is done by both appraiser and receiving authority.
The operational assignments include:
? Business Dimensions, which has 30 marks,
?
Qualitative Aspects of Business, which has 20 marks,
?
Managerial Dimensions, which has 40 marks and
?
Outstanding Performance, which has 10 marks. 45
Performance Appraisal
Non – Operational assignments include:
? Key Responsibility Areas, which has 50 marks,
?
Managerial Dimensions, which has 40 marks and
?
Outstanding Performance, which has 10 marks.
From the above scores given by the appraiser and reviewing authority. Performance is rated on the scale of:
•
Outstanding (80 – 100);
•
Good (60 – 79);
•
Average (40-59) and
•
Below Average (Below 40)
After the information so obtained from the assessment of performance, the company is able to provide training needs and in able to find out the potentiality of the employees. 46
Performance Appraisal
T
he final appraisal is done by the reviewing authority, which includes remarks and com-
ments on the appraisal done.
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Performance Appraisal
Managerial Ethics in Performance Appraisal
Performance appraisal system is effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser, which in turn, is heavily based on the appraisal system. Appraisal system, to be effective, should possess the following essential characteristics:
Reliability and validity:
Appraisal system provides consistent, reliable and valid information and data, which is used to defend the organization-even in legal challenges. If two appraisers are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. Then the technique satisfies the condition of inter-rater reliability. Appraisals must also satisfy the condition of validity be measuring what they are supposed to measure. For example, if appraisal is made for potential of an employee for promotion, it should supply the information and data relating to potentialities of the employee to take up higher responsibilities and carry on activities at higher level.
Job Relatedness:
The appraisal technique should measure the performance and provide information in Job related activities/areas.
Standardization:
Appraisal forms, procedures, administration of techniques, rating etc. should be standardized as appraisal decisions affect all employees of the group.
Practical Viability:
The techniques should be practically viable to administer, possible to implement and economical regarding cost aspect.
Legal Sanction:
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Performance Appraisal
It should have compliance with the legal provisions concerned of the country.
Training and Appraisers:
Because appraisal is important and sometimes difficult, it would be useful to provide training to appraisers namely insights and ideas on rating, documenting appraisals, and conducting appraisal interviews. Familiarity with rating errors can improve rater performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively.
Open Communication:
Most employees want to know how well they are performing on the job. A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisals period. Once this is known it becomes easy for employees to learn about the yardsticks and, if possible, try to improve their performance in future.
Employee Access to Results:
Employees know the rules of the game. They receive adequate feedback on their performance. If performance appraisals are meant for improving employee’s performance, then withholding appraisals results not serve any purpose. Employees simply could not perform better without having access to this information. Permitting employees to review the results of their appraisal allows them to detect any errors that may have been made. If they disagree with the evaluation, they can even challenge the same through formal channels. It follows then that formal procedures to be developed to enable employees who disagree with appraisal results which are considered to be inaccurate or unfair. They must have the means for pursuing their grievances and having them addressed objectively.
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Performance Appraisal
When management uses it as a whip or fails to understand its limitations, it fails. The key is not which forms or which method is used. Performance appraisal is used primarily to develop employees as valuable resources. Only then it would show promising results.
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Performance Appraisal
Strengths and Weakness of appraisal against Objectives
Strengths:
The strengths of appraising against accomplishment of objectives are almost the same as those of managing by objectives. Both are part of the same process, basic to effective managing and are means of improving the quality of managing. In the area of appraising, there are special and important strengths. Appraising on the basis of performance against verifiable has the great advantage of being operational. Appraisals are not apart from the job that mangers do but are a review of what they actually did as managers. There are always questions of how well a person did; of whether goals were missed or accomplished, and for what reasons; and of how much in the way of goal attainment should be expected. But information about what a person has done, measured against what that individual agreed was a reasonable target, is available. This information furnishes strong presumptions of objectivity and reduces the element of pure judgment in appraisal. Moreover, the appraisal can be carried on in an atmosphere in which superiors cooperatively work with subordinates rather than sitting in judgment of them.
Weakness:
These apply with equal force to appraisal. One of them is that it is entirely possible for persons to meet or miss goals through no fault of their own. Luck often plays a part in performance. For example, a new product’s acceptance may be far beyond expectations, and its success will make a marketing manager look exceptionally good, even though the quality of the marketing program and its implementation might actually be poor. Or an unpredictable cancellation of a major military contract might make the record of a division manager look unsatisfactory. Most evaluators will say that they always take uncontrollable or unexpected factors into account in assessing goal performance, and to a very great extent they do. But it is extremely difficult to do so. In an outstanding sales record, for example, how much can anyone be sure how
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Performance Appraisal
much was due to luck and how much to competence? Outstanding performers are rated highly, at least as long as they perform. Non-performers can hardly escape having a cloud cast over them. With its emphasis on accomplishing operating objectives, the system of appraising against these may overlook needs for individual development. Goal attainment tends to be shortrun in practice. Even if longer-range goals are included, seldom are they so long-range as to allow for adequate long-term development of managers. Managers concerned primarily with results might be driven by the system to take too little time to plan, implement, and follow through with programs required for their development and that of their subordinates. In the other hand, since managing by objectives better visibility to managerial needs, development programs can be better pinpointed. If individual development is to be ensured, however, goals in this area should be specifically set. From an appraisal as well as an operating management point of view, perhaps the greatest deficiency of management by objectives is that it appraises operating performance only. Not only is there the question of luck, mentioned previously, but also there are other factors to appraise, notably an individual’s managerial abilities. This is why an adequate appraisal system must appraise performance as a manager as well as performance in setting and meeting goals.
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Performance Appraisal
CASE STUDY
Appraisal Linked to Annual Increment: LITCO is the name of a small proprietary concern manufacturing plastic buckets of different sizes. The concern is doing good business and workers are paid fair wages. Total strength of employees is \ 85 including three supervisors, one assistant manager and one manager. The proprietor Mr. Shinde is a businessman cum politician but ensures that the business unit operates smoothly and makes reasonably good profit. This business unit started operations in the year 1994. The rules and practices are developed gradually with suitable modifications as and when necessary. The employees of the concern are rated by supervisors by means of graphic scale. The factors to be considered for rating are performance at work, loyalty, dependability, community activity, initiative, regularity, punctuality, potentiality to develop, relations with co-workers and creative ability. The rating factors, method of rating, time of rating, etc. are made clear to workers through notice, circular and departmental meetings. Yearly increment, promotion and annual prizes are based on the performance of workers as per this method. This system was accepted by workers for a period of six years since its introduction in 1996. There was no criticism or opposition to the scheme till 2001. However, in 2002, the situation changed and the whole performance appraisal system became a cause of conflict in the labour-management relations. In the year 2002, five employees were denied annual increment due to their low ratings. They, along with few others, met the owner Mr. Shinde and expressed their dissatisfaction with the rating they have received. They argued that some considerations in the ratings are vague and are unfair to workers. They made reference to "community service" and argue that such service is not a part of their normal job and what they do off - the job is none of the employer's business. They also argued that loyalty and relations with co-workers as considerations for rating are confusing. In addition, they argued that annual increment should not be linked with this performance appraisal. Annual increment should be given to all workers as a reward for year's service and for meeting growing expenditure of workers. Workers and their families are very much affected 53
Performance Appraisal
when yearly increment of Rs. 100 is denied to them. For workers, wage payment is the only source of income and yearly increase in the salary is a source of pleasure to them. They get psychological satisfaction because of such increase. Workers urge Mr. Shinde to be sympathetic in this regard. One worker also hinted that workers may be required to form a union if the injustice in regard to performance appraisal is not removed. This discussion convinced Mr. Shinde and his manager that present rating system was a dangerous source of friction and that its disadvantages out-weighed its advantages. Mr. Shinde (being a politician also) noted indirect threat of union formation in his unit and was cautious in his approach. He preferred dignified retreat. After few days, he announced the decision to delink annual increment with performance appraisal. However, the rating system was given continuation with some modifications. Moreover, the possibility of promotions were rare, the rating system was not likely to create new problems for workers and employer. This is how Mr. Shinde solved the problem relating to performance appraisal tactfully and also peacefully. Workers were happy and their respect for Mr. Shinde also increased to some extent. Questions: (1) (2) (3) Do you feel that annual increment should be based on performance appraisal? What is your opinion about "community activity" as one consideration in rating system? Do you agree with the decision taken by Mr.Shinde on the disputed issue? Is it a practical
decision? (4) Do you feel that too much importance need not be given to performance ap-
praisal in small factories/production units? (5) What are the possible consequences if Mr. Shinde had refused to amend his performance
appraisal method?
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Performance Appraisal
Possible Answers:
(1) At present, annual increment is given in a routine way to all categories of labour force
though management can link it with performance appraisal. Annual increase in the salary has economic, social and psychological justification. Its refusal affects workers and their family members. It also makes workers angry, dissatisfied and non-co-operative. Hence, annual increment should be given to all workers and should not be linked with performance appraisal. (2) "Community Activity" as a consideration in the graphic scale appears to be redundant
for appraisal purpose. This issue is not directly concerned with factory work. Secondly, reliable information on this consideration may not be available. Thirdly, majority of workers are not participating in this activity and naturally their marking will be "below average". Finally, there is opposition to this consideration and may lead to controversy if the management remains adamant on the matter. (3) The decision taken by Mr. Shinde on the issue was wise and practical. Increment
need not be linked with performance as it is not a normal practice. Similarly, minor adjustment in the appraisal system does not defeat its purpose. Omitting one or two considerations from the rating system will not make the system defective. Moreover, considerations which are ambiguous should not be selected for appraisal purpose. Mr. Shinde's decision is a practical one and also useful for cordial industrial relations. (4) Performance appraisal is important and offers many benefits particularly in large organi-
sation which employs huge manpower. However, in small units, workers are limited, chances of promotion are very few and there is limited scope for the use of results of performance appraisal. However, the system should be there as it is one of the rights of the management. Mr.Shinde has continued the system but too much importance is not attached to the system. The system is necessary as it keeps a check on the employees. (5) Mr. Shinde had every right to be firm on the issue of performance appraisal and refuse to
accept the views expressed by workers. However, the possible consequences are likely to be seri55
Performance Appraisal
ous. Here, workers may start an agitation or may not offer necessary co-operation in the production work. They may form a union in order to fight collectively. Outside leadership may also come in the picture. The cordial industrial relations may be replaced by hostile relations. This is as good as inviting new problems. There may be stoppage of production and profitability may go down. Taking strong stand means paying heavy price on minor issue. Mr. Shinde has avoided this situation.
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Annexure Questionnaire
Q. What is the purpose of performance appraisals?
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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?
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Self appraisal or self evaluation is the review of the performance by the employee him-
self. The self evaluation is discussed with the employee and if appropriate, is incorporated in the final rating. Q. Is there any comprehensive formula to calculate the overall rating?
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No, there is no comprehensive formula for doing so. The overall rating is 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?
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To complete the performance appraisal subjectively and fairly, we consult the previous
supervisor or manager. If this is not possible, we consult the supervisor’s superior to get his views and inputs. Q. How can input/feedback be collected for the appraisal process?
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Different input forms are used for taking the feedback from the various sources like the
superior, peers, customers, vendors and the employee himself. All the perspectives thus received is combined in the appropriate manner and to get an overall, complete view of the employees’ performance. Observation is done by the superior to obtain information. Q. What if the employee refuses to agree or/and accept the review?
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First of all, we ensure that the employee has got a chance to review his completed ap-
praisal form. If the employee refuses to accept his appraisal, we 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?
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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 employee’s 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?
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The Individual performance reviews is kept confidential and is not accessible to other
employees. It is also stored at a safe place with limited access. Outdated reviews is destroyed. The appraisal is kept as a part of the HR records of the employee.
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Section I. SELF ASSESSMENT FORM: ( April – March)
Employee Name :
Key Code & DOJ (dd/mm/yy) Designation
Department:
Location Head of Department
(Please answer all questions in point form. Be as specific as possible. If you need more space to answer, you may use a blank sheet and attach it to this form. ) 1. What were your targets for the last year? List your targets/objectives/performance areas for last year in the left-hand column. Note your actual achievements in the right hand column. Specify whether the objectives set were reached or not. Use this column to also note missed opportunities for the last year, or targets that in your opinion should have been included. Objectives/Targets A. Quantitative Targets B. Non Quantitative Targets 2. What were the factors, if any, for non-achievement of your targets/objectives for last year? For each factor, you may explain details. 1. 3. What, in your opinion, are your strengths that contribute to your effective performance as an individual and your entire department? Actual Achievements 1.
4. What, in your opinion, are your weaknesses and how do they affect your performance?
5. a. Indicate the peer group interactions in which you received positive assistance.
5. b. Indicate where you did not receive such cooperation?
6. Indicate the areas in which you need training that would enhance your performance?
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Performance Appraisal
• • • • •
Organization/Supervisory Skills Communication/Presentation Skills Technology Related Training Technical Skills pertaining your job - be specific
Others - be specific 7. What other assistance do you require from the management to be able to achieve your targets?
8. Outline your targets/objectives for next year? (April 2006-March 2007)Objectives/Targets
Signature of employee:______________ Date __________
Section II. SUPERIOR'S ASSESSMENT
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Performance Appraisal
Employee Name:
Key Code & DOJ (dd/mm/yy) Designation
Department:
Location Head of Department
Date: ____________
1. Evaluate the overall performance of the employee. 2. What, in your opinion, are the areas of strength for the employee and how have they contributed to performance? 3. Outline the areas that require future improvements. 4. What are your recommendations for the employee? (For eg. Job Rotation, Training Needs, other actions.) 5. Modification to Targets/Objectives set by employee for April 2006 - March 2007.. 6. a. Overall Ranking of Employee 1 2 3 4 5 6. b. Relative Ranking of Employee as compared to his/her peers 1 2 3 4 5 (Use the following rating scale to rate the employees: Rating Scale 1-5. 1: Excellent, 2: Very Good, 3: Good, 4: Average, 5: Below Average) Signature of superior: ___________
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Guidelines for Appraisers:
1. PURPOSE: The basic purpose of appraisal apart from compensation is to identify:
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Employees with high potential Training needs Developmental needs for career progression
Another purpose of the appraisal exercise is to motivate employees to improve their performance. Review is written and delivered in a way that supports these outcomes. 2. HOW TO CONDUCT APPRAISALS: 2.1 Rapport Building:
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Give an adequate advance notice of at least a day so that there is no element of surprise. Let the discussion be in a place where there is no disturbance. Please do not receive any telephone calls as it would divert the attention. Spend at least 20 to 30 minutes with each employee. Create a proper climate for discussion so that the employee is relaxed and at ease and is free of nervousness, anxiety and tension. Ask the employee to comment on his performance first. It is better to start discussions with the employee’s strengths and achievements. Encourage discussion on points of disagreement and check for mutual understanding so that there is a “win-win” situation. 2.2 Nuts and Bolts of providing Feedback:
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Feedback should be specific and be clearly aimed at identifying strengths and development needs. 62
Performance Appraisal
• •
Provide positive feedback first. Feedback should be descriptive and not evaluative. It should not be affected by recent events. It should consider the full period of appraisal in toto. Feedback should focus on behavior and not on the person. Don’t criticize the person per se but criticize behavior. Feedback should reinforce positive behavior and actions. Feedback should not be based on hearsay, but be based on our professional interactions. Feedback should be based on data (so as to be more objective) and not on impressions. Feedback should be based on traits or qualities which can be modified and not on traits or personality factors which cannot be modified. E.g.: poor eyesight, stammering etc. One should ensure that while giving feedback, person’s self-esteem should not get diluted. Dignity and respect of each employee must be maintained.. “Process of giving feedback should be like an expert surgeon who performs successful surgery with least loss of blood.” 2.3 Consolidation:
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After the discussion is over, kindly record your comments on Section II of the Assessment Form
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Guidelines for Appraisee (Employees):
I) The following guidelines will make it easier to complete Step 1.
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While filling up the form, please provide a complete and a balanced assessment of your Do not get influenced by the recent events, but review the entire appraisal period. After filling up the ‘Self Assessment Form – Section I’, make sure to schedule a perforThe purpose of this review discussion is to have a dialogue about your strengths and ar-
performance.
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mance review discussion with your HOD/RD.
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eas for improvement. II) The following guidelines will help you to make the appraisal discussions more productive:
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Play an active role. Express personal commitment to process. As a matured professional, solicit feedback proactively to improve future performance. Please take negative feedback (if any) in the right spirit. Your HODs will give you feedback, both positive and negative. Listen carefully and Take advantage of your superior’s experience by asking for suggestions they have for Use the feedback to plan out the action steps for the coming year. As a part of self-development effort, please work out a time-bound improvement plan so Be prepared to describe to your HOD/RD any ideal opportunities that will allow you to Appraisal exercise is the best opportunity to spend quality time with your boss. Please Take the feedback in the right spirit. “Feedback is the breakfast of champions.”
don’t be defensive to negative feedback as it is meant to improve your performance.
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your improvement.
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that the same areas of improvement do not reappear next year.
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take up greater challenges and additional responsibilities.
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feel free to share your concerns, issues and anxiety.
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Performance Appraisal
Findings
• In the whole appraisal system, often superiors assume the role judges. In contrast the aim is to develop employees; managers need to be counselors, helpers and teachers. • Maximum employees in the organisation were of the opinion that the performance appraisal is a positive step taken by the organization to help them to improve their own performance. • Employees were hopeful that after the performance appraisal is over they will be properly rewarded for their work and that it was a way to ensure that their efforts don’t go unnoticed. • The employees showed eagerness to learn from their mistakes which they hoped to rectify and perform better.
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Although the employees believe that performance appraisals are their betterment, in the beginning they had doubts in their minds about issue of bias being a factor in the process of evaluation.
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Performance Appraisal
BIBLIOGRAPHY Company Visited:-
Sharekhan Ltd. Lower Parel (W)
Website: -
www.sharekhan.com
Referred Online Book:Ten Minute Guide to Performance Appraisals by Dale Furtwengler -
http://safari.java.net
Books referred: ? Human Resource and Personnel Management by Tata McGraw Hill Publishing Company Limited. K Aswathappa
? Organizational Behaviour. Stephen Robbins
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