Hal performance appraisal hr1


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Hal performance appraisal hr1

  2. 2. PREFACEThere are number of forces that make HR the greatest support system in theOrganization. Employees play a great role in the success of any organization. Someasuring the performance of employees is really a task of great concern and alsorecruiting the right person for the right job contributes to the success of the organization.This Project Report has been completed in Partial fulfillment of my ManagementProgram, Bachelor of Business administration (BBA) in the company ―HindustanAeronautics Limited ”. The topic of my project was “Performance Appraisal inHindustan Aeronautics Limited”. This topic is come under Performance ManagementSystem of Hindustan Aeronautics Limited. 2
  3. 3. ACKNOWLEDGEMENTI avail the opportunity to express my gratitude to Mr. Jatin Srivastava (HOD-BBA) whoalways try to sow seed of agronomism amongst us and created a disciplinary culture inthe student.I also express my gratitude to my faculty Mr. Rahul Maurya, Faculty ofmanagement, B.B.D.N.I.T.M., Lucknow and staff of who have been instrumental inmaking this report useful one.Finally, I wish to thank to my family and friends for their inspiration, encouragement andsupport which enabled me to in timely submission and report. Sumit Singh Sisodia BBA III semester 3
  4. 4. TABLE OF CONTENT1. Preface…………………………………………………………………2. Acknowledgement…………………………………………………….. Part I (A) Introduction to company………………………………………… (B) Introduction to performance appraisal……………………………. Part II (I) Research Objectives……………………………………………… (II) Research Methodology ………………………………………….. (III) Scope of Research ………………………………………………. (IV) Data Analysis & Interpretation ………………………………… (V) Findings………………………………………………………… (VI) SWOT Analysis ………………………………………………… (VII) Recommendation ……………………………………………… (VIII) Conclusion……………………………………………………… (IX) Limitation……………………………………………………… (X) Bibliography…………………………………………………… (XI) Appendix 1. Questionnaire ………………………………………………… List of table1. Financial Highlights…………………………………………………….2. Assignment of Weightages……………………………………………. .3. Scoring of KRAs………………………………………………………….4. Modification in KRAs………………………………………………….... 4
  5. 5. List of Figures1. Our services…………………………………………………………………2. Organization structure………………………………………………………3. The cycle of performance management…………………………………….4. PMS process flow…………………………………………………………..5. Goal…………………………………………………………………………6. Mid year review …………………………………………………………….7. Annual review……………………………………………………………….8. Rating scale…………………………………………………………………9. Competency framework …………………………………………………….10. Competency framework with rating scale ………………………………….11. Feedback process……………………………………………………………12. Satisfaction level of employees with new PMS…………………………..13. Satisfaction level of employees with online system of PMS …………….14. Satisfaction level of employees with the critical incident diary ……………15. Performance of balanced score card………………………………………16. KRAs measuring performance ……………………………………………17. Hoshin kanri approach ………………………………………………………18. Satisfaction level with recruitment & selection process …………………19. Deduction from salary………………………………………………………20. Recruitment through employees referral………………………………….21. Satisfaction level with salary package …………………………………….22. Recruitment & selection process fulfills the requirement of organization23. Formalities after recruitment & selection process ……………………… 5
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  7. 7. INTRODUCTION TO COMPANYABOUT THE ORGANISATION:HAL a flagship company of our country is a great organization, with a glorious future. The Hindustan Aeronautics Limited is the only organization of its kind engaged inthe production; maintenance and overhauling of defense Aircraft and missiles. MIG 27,MIRAGE 2000, DORNIER, JAGUAR, CHEETAH, LIGHT COMBAT AIRCRAFT(LCA), SU-30, HJT-36 (IJT) AJT, ADVANCE LIGHT HELICOPTOR (ALH) are someof the major Aircrafts supplied by H.A.L. to the Indian Air Force. Organization is alsoinvolved in the manufacture and assembly of system for India‘s space program. Hindustan Aeronautics Limited is an organization, where integrated air-borneweapons platform are conceived, developed, manufactured and service. It has got a raredistinction of holding the capability spanning from the entire range of productionconception to after sales report. The beginning of HAL can be traced to the year 1940, when a far-sightedindustrialist, the late Seth Walchand Hirachand set up a company called HindustanAircraft Limited at Bangalore with the object of establishing an Aviation Industry thatcan manufacture, assemble and overhaul aircraft under license. Initially, aircraft likeCurtiss Hawk, Vultee Bomber and Harlow trainer were taken up for manufacture andoverhaul in collaboration with Inter continental Aircraft Company of USA. With the escalation of the Second World War, the government of India took overthe management of the company in 1942 and handed it over to US Air Force for repairand overhaul of various aircraft. Between 1942 and 1945, a total of 1000 aircraft and 7
  8. 8. 3400 engines were overhauled. The main activity for the next few years after the war wasreconditioning and conversion of war surplus aircraft for the use of IAF and Civiloperators.MISSION & VALUESMISSION: “To become a globally competitive aerospace industry while working as aninstrument for achieving self-reliance in design, manufacture and maintenance ofaerospace Defense equipment and diversifying to related areas, managing the business oncommercial lines in a climate of growing professional competence‖.VALUES: We are committed to these values to guide us in our activities.CUSTOMER SATISFACTION: We are dedicated to building a relationship with our customers where we becomepartners in fulfilling their mission. We strive to understand our customer‘s needs and todeliver products and services that fulfill and exceed all their requirements.COMMITMENT TO TOTAL QUALITY: We are committed to continuous improvement to all our activities. We will supplyproducts and services that conform to highest standards of design, manufacture,reliability, maintainability and fitness for use as desired by our customer.COST AND TIME CONSCIOUSNESS: We believe that our success depends on our ability to continually reduce the costand shorten the delivery period of our products and services. We will achieve this byeliminating waste in all activities and continuously improving all processes in every areaof our work. 8
  9. 9. INNOVATION AND CREATIVITY: We believe in striving for improvement in every activity involved in our businessby pursuing and encouraging risk- taking, experimentation and learning at all levels with in the company with a view to achieving excellence and competitiveness.TRUST AND TEAM SPIRIT: We believe in achieving harmony in work-life through mutual trust, transparency,co-operation and sense of belonging. We will strive for building empowered teams towork towards achieving organization goals.RESPECT FOR THE INDIVIDUAL: We value our people. We will treat each other with dignity and respect and strivefor individual growth and realization of every one‘s full potential.INTEGRITY: We believe in a commitment to be honest, trustworthy and fair in all our dealings.We commit to be loyal and devoted to our organization. We will practice self-disciplineand own responsibility for our actions. We will comply with all requirements so as toensure that our organization is always worthy of trust. 9
  10. 10. OBJECTIVES OF HAL In April, 1971 the board of directors of HAL appointed a committee of HAL to review the total functioning of the company and make its recommendations. One of the study teams set up by committee had gone into various aspects of the objectives of HAL in great detail and made valuable suggestions for determining the objectives of HAL. The objectives of HAL can be divided into two parts: 1. Basic objectives 2. Other objectives Basic Objectives: (i) To serve as an instrument of the national policy to achieve self-reliance in the design, development and production of aircraft and aeronautical equipment to meet the country‘s changing and growing needs with special emphasis on military requirements.(ii) In fulfillment of this objective the company shall regard itself fundamentally responsible for design and development, relaying however upon such relevant facilities as are available in other national institutions but always holding itself basically responsible for the growth and furtherance of the country‘s aeronautical capacity.(iii) To so conduct its business economically and efficiently that it can contribute its due shares to the national efforts to achieve self-reliance and self-generating economy.(iv) Towards this end, to develop and maintain this organization which will readily respond to and adopt the changing matrix of socio-techno economic relationship and wherein a socio climate of growing professional competence, self-discipline, mutual understanding, deep commitment and a sense of belonging will be fostered 10
  11. 11. and each employee will encouraged to grow in accordance with his potential for the furtherance of the organizational goal. Other Objectives: Consistent with the basic objective of the company, the personnel development of the corporate office has adopted certain specific objectives which will act as a source of inspiration and guidance in involving personal policies and farming rules and regulation for growth and development of employees and to ensure their deep commitment and sense of belonging to the company. The specific objectives are stated below: (i) Ensure quality of personnel of all level and provide them the right work environment, job satisfaction and professional challenges. (ii) Provide a healthy blend of employees who have growth with the organization and those selected from outside.(iii) Ensure employment of minimum number of personnel and avoid surpluses.(iv) Motivate employees to be increasingly achievement oriented. (v) Provide adequate opportunities for personnel to improve the level of their professional knowledge.(vi) Personnel with talent and potential growth to be developed to should have higher responsibilities.(vii) Ensure uniformity in principal conditions of service. 11
  12. 12. HISTORY AND GROWTH of HAL Hindustan Aeronautics Limited (HAL) came intoexistence on 1st October 1964. The Company was formed by the merger of HindustanAircraft Limited with Aeronautics India Limited and Aircraft Manufacturing Depot,Kanpur.The Company traces its roots to the pioneering efforts of an industrialist withextraordinary vision, the Late Seth Walchand Hirachand, who set up Hindustan AircraftLimited at Bangalore in association with the erstwhile princely State of Mysore inDecember 1940. The Government of India became a shareholder in March 1941 and tookover the Management in 1942.Today, HAL has 16 Production Units and 9 Research and Design Centers in 7 locationsin India. The Company has an impressive product track record - 12 types of aircraftmanufactured with in-house R & D and 14 types produced under license. HAL hasmanufactured 3550 aircraft (which includes 11 types designed indigenously), 3600engines and overhauled over 8150 aircraft and 27300 engines.HAL has been successful in numerous R & D programs developed for both Defense andCivil Aviation sectors. HAL has made substantial progress in its current projects: Dhruv, which is Advanced Light Helicopter (ALH). 12
  13. 13. Tejas - Light Combat Aircraft (LCA). Intermediate Jet Trainer (IJT). Various military and civil upgrades.Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard inMarch 2002, in the very first year of its production, a unique achievement.HAL has played a significant role for Indias space programs by participating in themanufacture of structures for Satellite Launch Vehicles like PSLV (Polar Satellite Launch Vehicle) GSLV (Geo Stationary Launch Vehicle) IRS (Indian Remote Satellite) INSAT (Indian National Satellite)There are three joint venture companies with HAL: BAeHAL Software Limited Indo-Russian Aviation Limited (IRAL) Snecma HAL Aerospace Pvt LtdApart from these three, other major diversification projects are Industrial Marine GasTurbine and Airport Services. Several Co-production and Joint Ventures withinternational participation are under consideration.HALs supplies / services are mainly to Indian Defense Services, Coast Guards andBorder Security Forces. Transport Aircraft and Helicopters have also been supplied toAirlines as well as State Governments of India. The Company has also achieved afoothold in export in more than 30 countries, having demonstrated its quality and pricecompetitiveness. HAL has won several International & National Awards forachievements in R&D, Technology, Managerial Performance, Exports, EnergyConservation, Quality and Fulfillment of Social Responsibilities. 13
  14. 14. HAL was awarded the ―INTERNATIONAL GOLD MEDAL AWARD‖ forCorporate Achievement in Quality and Efficiency at the International Summit. ORGANISATIONAL GROWTH OF HAL1940: H.A.L was set up by Seth Warchand Hirachand in association with the government of Mysore as a private limited company.1941: First product ―HARLOW TRAINER AIRCRAFT‖ & ―CURLINESS HAWK AIRCRAFT‖ handed over to government of India.1942: Company was handed over to the U.S. AIR FORCE. HAL repaired over 100 different varieties of aircraft and 3800 piston engines.1945: Government of India took over the management of HAL again after the Second World War.1949: First percivical apprentice aircraft assembled.1951: The control of HAL was shifted to ministry of defence from ministry of industry.1954: The first HINDUSTAN TRAINER II (HT—II) had its maiden flight.1956: HAL comes under the public sector.1960: Aircraft Manufacturing Department at Kanpur was established.1962: HINDUSTAN AERONAUTICS INDIA LIMITED (HAIL) was formed to manufacture MIG-21 aircraft. Three factories at Nasik, Koraput, and Hyderabad were established.1964: HAIL was dissolved and its assets merged with aeronautics India limited and company by the name of HAL was formed.1969: An agreement with USSR AWS reached for the license production of MIG-21 AIRCRAFT.1970: Helicopters Division was established to manufacture Helicopters.1973: Lucknow Division was formed for manufacture of more than 500 types of Instruments and Accessories.1976: An agreement with USSR for license for MIG-21 AND BIS –AIRCRAFT. 14
  15. 15. 1979: Agreement with British aerospace for manufacture JAGUAR AIRCRAFT.1982: Agreement with USSR for license manufacturing of MIG-27M AIRCRAFT.1983: Korwa Division lraged division for HAL formed.1990: Design and Development of Advanced Light Helicopter.1996: Major servicing of the first batch of MIRAGE – 2000 AIRCRAFT was under taken. It conducted several ―C‖ CHECKS ON BOEING 737 AIRCRAFT.1998: IGMT a new Division was established at Bangalore.1998: Establishment of Industrial & Marine Gas Turbine Division for aerodoriative gas turbines / Industrial engines.2000: Establishment of Airport Service Service Centre for C0-ordinating the operations at HAL Airport – Bangalore.2002: Establishment of Sukhoi Engine Division at Koraput.2002: Expansion of Nasik Division as Aircraft Manufacturing Division and Aircraft Overhaul Division.2006: HAL ranked 45th among Top Defense Firm in the World.2006: 19th July, HAL – IAI cooperation in Aero structure.2006: 21st July, Rolls – Royce & HAL celebrate 50 year of partnership.2006: HAL launches newspaper from Minsk square on 1st September.2006: 3rd September, SU-30 MKI Programme on schedule: HAL.2006: 14th October, HAL Launches Helicopter ambulance, Charter Service named ―Vayu Vahan‖.2006: 20th December, HAL receives EEPC Award for the year 2004-05.2007: 5th June, HAL completes planting 25 Lakh saplings.2007: 22nd June, HAL gets Navratna Status.2007: 2nd July, Ashok Nayak is HAL‘s new MD.2007: 6th August, HAL ranked 34th among top 100 defence firm in the world.2007: 16th August, DHRUV with SHAKTI ENGINE and Weapons make maiden flight. 15
  16. 16. Figure (1) our services 16
  17. 17. REPAIRS, MAJOR SERVICING AND SUPPLY OF SPARES The Division carries out Repair and Overhaul of Accessories, with minimum turn-around-time. Site Repair facilities are offered by the Division by deputing team of expertEngineers / Technicians. Services provided for: Military Aircraft MIG Series Jaguar Mirage-2000 Sea - Harrier AN-32 Kiran MK- I / MK- II HPT - 32 SU-30 MKI Civil Aircraft Dornier-22B AVRO HS-748 Helicopters Chetak (Alouette) Cheetah (Lama) ALH (IAF / NAVY / COAST GUARD / CIVIL) 17
  18. 18.  Sub-contract Capabilities The Division has comprehensive manufacturing capabilities for various Hi-tech components, Equipment and Systems to customers specifications and ensures high quality, reliability and cost effectiveness. The Division has over 25 years of experience in producing aeronautical accessories making it an ideal partner for the International Aero Engineering Industry. The Division also manufactures and supplies complete range of components ofCheetah (Lama) & Chetak (Alouette) Helicopters, Jaguar and MIG series Aircraft toDomestic and International Customers to support their fleet.CUSTOMER SERVICES The Division has full-fledged infrastructure, facilities and systems for ensuringoptimum level of Customer satisfaction for the products and services rendered. The majorareas include:Overhaul/Repair of Rotables The Division takes up the overhaul/repair of the entire range of Electrical,Instrument, Mechanical and Armament Rotables.Supply of Spares and other major units The Division manufactures and supplies the entire range of spares required forfirst and second-line servicing of aircraft at the IAF bases. Canopies, Flexible RubberFuel Tanks, Main and Nose Undercarriages, Ejection seats and Ground Support / GroundHandling Equipment are a few of the items supplied. 18
  19. 19. Site Repair The Division undertakes site repair of Aircraft at the IAF bases by deputing siterepair teams.Defect Investigation/Failure Analysis The aggregates which are received on premature withdrawal from the units isstudied and the causes for defects/failures are investigated. Repetitive cases are taken upfor in-depth study and modifications are incorporated in the units to minimise therecurrence of such defects/failures in future.Product Training The Division conducts various training programs for customers in specialisedareas for better utilisation of the products. The programs cover Weapon Systems, AutoPilot Systems, Electrical Systems and Hydraulic Systems.Positing of Service Engineers The Division has posted Service Engineers at various IAF bases to closely liaiseand assess the requirement of the customers. Based on the feed-back received from theseService Engineers, the Division renders adequate support for fully utilising the products.DESIGN SUPPORTProduct Improvement Modifications The Division has incorporated various modifications on the MIG variants withrespect to - Flight Safety Reliability and Maintainability Performance Improvement Integration of New Equipment Additional Armament Carrying Capability 19
  20. 20. PARTICIPATION IN OTHER PROJECTSALH The Division has been manufacturing and supplying a large number of componentsfor the Advanced Light Helicopter (ALH). In addition, the Division manufactures under-carriages for.LCA The Division has undertaken NC machining of frames for Light CombatAircraft (LCA). The Division manufactures undercarriages for LCA also.MIRAGE 2000 UNDERCARRIAGE OVERHAUL The Division is in the process of setting up facilities to undertake overhaul ofundercarriages for Mirage-2000 aircraft.TRANSPORT AIRCRAFT The Division is participating in the development and co-production of 15-seaterTransport aircraft for the civil market. Wing Panels, Interspar Ribs and Bulkheads will beproduced at the Division. In addition, the Division will be undertaking the assemblyof wings.Other Service Facilities (Engine Division)1. Repair and Overhaul of Engines2. Spectro Photo-metric Oil Analysis (SOAP test)3. Electron Beam Welding4. Robotic Plasma Spray Facility5. Sermetal Coating (High Temperature Corrosion Resistance Painting)6. Chemical Milling 20
  21. 21. PRESENT SETUP OF THE ORGANISATIONHindustan Aeronautics Limited has three production complexes – Bangalore, MIG andAccessories and one Design complex each headed by a Managing Director, reporting toChairman, HAL. HAL has spread its wings to cover various activities in the area ofDesign, Development, Manufacturing and Maintenance. Today HAL has 16 productiondivisions / units, 7 at Bangalore and 1 each at Nasik, Koraput, Lucknow, Kanpur,Korwa, Hyderabad and Barrackpore. These divisions / units are fully backed by nineDesign Centers, these Centers are engaged in the design and development of theCombat aircraft, Helicopters, Aero engines, Engine test beds, Aircraft communicationand Navigation Systems Accessories of Mechanical and Fuel system and instruments.Major products of Accessories Complex:Lucknow Division Landing Gear, Wheels, Brakes, Hydraulic & Fuel accessories & aircraft instruments GSE & GHE, ECS etc.Korwa Divison INS, HUDWAC, NAV attack LRMTS, FDR, Auto Stab System.Hyderabad Division Surveillance Radar, Precision Approach Radar, INCOM, RAM, IFF, VHF / UHF (5).Kanpur Division DO-228, HPT-32 and Civil aircrafts. 21
  22. 22. ORGANISATION STRUCTURE HAL CORPORATEDESIGNCOMPLEX Aircraft R & D Center Rotatory wing R & D Center Engine & Test BANGLORE bed R & D COMPLEX Center Strategic  Aircraft Electronics R & Division ACCESSORIES D Center  Engine COMPLEX Aircraft Updates Division R & D Center  Foundry &  Accessories Aerospace Forge Division Division System &  Helicopter Lucknow Equipment R & Division  Avionics D Center  Aerospace Division Gas Turbine R & Division Korwa MIG D Center  Overhaul  Avionics COMPLEX Control Division Division Materials &  Industrial & Hyderabad  Nasik Processes lab & Marine gas  Transport Division NDT Center R & Turbine Aircraft  Koraput D Center Division Division Division Kanpur Figure (1) Organization Structure 22
  23. 23. ORGANIZATIONAL CHARTAll over India H. A. L has 7 divisions; these divisions are dedicated for different purposerelated to the manufacturing of commercial and fighter aircrafts. The divisions are asfollows:1. Bangalore Division It is divided into 5 divisions: a) Air craft division, which also consist a runway. b) Engine division, which is indulged mainly in manufacturing of LCA Engine. c) Helicopter division. d) Overhaul division. e) Design bureau.2. Nasik DivisionIt is currently dealing with Russian accessories repair, overhaul and manufacturing which are used in aircrafts.3. Kanpur DivisionIt is dealing with assembly of whole commercial aircrafts like Puspak, Dornier and other major products are DO-228, HPT-32 and Civil aircrafts etc.4. Lucknow DivisionIt is an accessories division which deals with manufacturing of more than 1400 accessories like, alternator, generators, tachometer, tacho generator and other major products are Landing gear, Wheels, Brakes, Hydraulic & Fuel accessories, aircraft instruments GSE, GHE & ECS etc.5. Korwa DivisonIt also deals with design and manufacturing of accessories (mainly electronics) and other major products are INS, HUDWAC, NAV attack LRMTS, FDR, Auto Stab System.6. Koraput Division It is indulged in assembly of engines of aircraft.7. Hyderabad Division It is an accessories division. They manufacturing an accessories like Surveillance Radar, Precision Approach Radar, INCOM, RAM, IFF, VHF / UHF (5). 23
  24. 24. Financial Highlights Hindustan Aeronautics Limited (HAL) has cruised past the Rs.5, 000-crore markfor the first time with a sales turnover of Rs.5, 341.50 crores ($1.20 billion) during theFinancial Year 2005-06, The Value of Production has also gone up by 18.69% to Rs.5,916.62 crores, while the Profit of the Company (Profit Before Tax) soared to Rs.1,126.29 crores, which is an increase of 48.54% over the previous years performance.Contracts worth Rs. 17,800 crores (4 billion USD) were concluded during the year. The highlights are given below: Rupees in Crores Growth over Particulars 2004-05 2005-06 Previous Year Sales 4534 5342 17.82% VOP 4984 5916 18.69% Profit before tax 758 1126 48.54% Profit after tax 501 771 53.89% Gross Block 1417 1694 19.54% Table (1) Financial Highlights 24
  25. 25. INTRODUCTION TO TOPICPerformance Appraisals are essential for the effective management and evaluation ofstaff. Appraisals help develop individuals, improve organizational performance, and feedinto business planning. Formal performance appraisals are generally conducted annuallyfor all staff in the organization. Each staff member is appraised by his or her linemanager. Directors are appraised by the CEO, who is appraised by the chairman orcompany owners, depending on the size and structure of the organization.Annual performance appraisals enable management and monitoring of standards,agreeing expectations and objectives, and delegation of responsibilities and tasks. Staffperformance appraisals also establish individual training needs and enable organizationaltraining needs analysis and planning.Performance appraisals also typically feed into organizational annual pay and gradingreviews, which commonly also coincides with the business planning for the next tradingyear.Performance appraisals generally review each individuals performance against objectivesand standards for the trading year, agreed at the previous appraisal meeting.Performance appraisals are also essential for career and succession planning - forindividuals, crucial jobs, and for the organization as a whole.Performance appraisals are important for staff motivation, attitude and behaviourdevelopment, communicating and aligning individual and organizational aims, andfostering positive relationships between management and staff.Performance appraisals provide a formal, recorded, regular review of an individualsperformance, and a plan for future development. 25
  26. 26. Job performance appraisals - in whatever form they take - are therefore vital formanaging the performance of people and organizations.Managers and appraisees commonly dislike appraisals and try to avoid them. To thesepeople the appraisal is daunting and time-consuming. The process is seen as a difficultadministrative chore and emotionally challenging. The annual appraisal is maybe the onlytime since last year that the two people have sat down together for a meaningful one-to-one discussion. No wonders then those appraisals are stressful - which then defeats thewhole purpose.There lies the main problem - and the remedy.Appraisals are much easier, and especially more relaxed, if the boss meets each ofthe team members individually and regularly for one-to-one discussion throughoutthe year.Meaningful regular discussion about work, career, aims, progress, development, hopesand dreams, life, the universe, the TV, common interests, etc., whatever, makesappraisals so much easier because people then know and trust each other - which reducesall the stress and the uncertainty.Put off discussions and of course they loom very large. So one should not wait for theannual appraisal to sit down and talk. The boss or the appraised can instigate this. Anemployee with a shy boss, then take the lead.A boss who rarely sits down and talks with people - or whose people are not used totalking with their boss - should set about relaxing the atmosphere and improvingrelationships. Appraisals (and work) all tend to be easier when people communicate welland know each other. 26
  27. 27. So one needs to sit down together and talk as often as one can, and then when the actualformal appraisals are due everyone will find the whole process to be far more natural,quick, and easy - and a lot more productive too.Appraisals - Social responsibility and whole-person development:There is increasingly a need for performance appraisals of staff and especially managers,directors and CEOs, to include accountabilities relating to corporate responsibility,represented by various converging corporate responsibility concepts including: the TripleBottom Line (profit people planet); corporate social responsibility (CSR);Sustainability; corporate integrity and ethics; Fair Trade, etc. The organization mustdecide the extent to which these accountabilities are reflected in job responsibilities,which would then naturally feature accordingly in performance appraisals. More aboutthis aspect of responsibility is in the director‘s job descriptions section.Significantly also, while this appraisal outline is necessarily a formal structure this doesnot mean that the development discussed with the appraisee must be formal andconstrained. In fact the opposite applies. Appraisals must address whole persondevelopment - not just job skills or the skills required for the next promotion.Appraisals must not discriminate against anyone on the grounds of age, gender, sexualorientation, race, religion, disability, etc.When designing or planning and conducting appraisals, seek to help the whole-person togrow in whatever direction they want, not just to identify obviously relevant work skillstraining. Increasingly, the best employers recognize that growing the whole personpromotes positive attitudes, advancement, motivation, and also develops lots of newskills that can be surprisingly relevant to working productively and effectively in any sortof organization. 27
  28. 28. Developing the whole-person is also an important aspect of modern corporateresponsibility, and separately (if you needed a purely business-driven incentive foradopting these principles), whole-person development is a crucial advantage in theemployment market, in which all employers compete to attract the best recruits, and toretain the best staff.Therefore in appraisals, be creative and imaginative in discussing, discovering andagreeing whole-person development that people will respond to, beyond the usual jobskill-set, and incorporate this sort of development into the appraisal process. AbrahamMaslow recognized this over fifty years ago.If you are an employee and your employer has yet to embrace or even acknowledge theseconcepts, do them a favour at your own appraisal and suggest they look at these ideas, ormaybe mention it at your exit interview prior to joining a better employer who caresabout the people, not just the work.Are performance appraisals beneficial and appropriate :It is sometimes fashionable in the modern age to dismiss traditional processes such asperformance appraisals as being irrelevant or unhelpful. Be very wary however ifconsidering removing appraisals from your own organizational practices. It is likely thatthe critics of the appraisal process are the people who cant conduct them very well. Its acommon human response to want to jettison something that one finds difficult.Appraisals - in whatever form, and there are various - have been a mainstay ofmanagement for decades, for good reasons.Think about everything that performance appraisals can achieve and contribute to whenthey are properly managed, for example:  Performance measurement - transparent, short, medium and long term  Clarifying, defining, redefining priorities and objectives 28
  29. 29.  Motivation through agreeing helpful aims and targets  Motivation though achievement and feedback  Training needs and learning desires - assessment and agreement  Identification of personal strengths and direction - including unused hidden strengths  Career and succession planning - personal and organizational  Team roles clarification and team building  Organizational training needs assessment and analysis  Appraisee and manager mutual awareness, understanding and relationship  Resolving confusions and misunderstandings  Reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc  Delegation, additional responsibilities, employee growth and development  Counseling and feedback  Manager development - all good managers should be able to conduct appraisals well - its a fundamental process  The list goes on.People have less and less face-to-face time together these days. Performance appraisalsoffer a way to protect and manage these valuable face-to-face opportunities. The advice isto hold on to and nurture these situations, and if one is under pressure to replaceperformance appraisals with some sort of (apparently) more efficient and cost effectivemethods, one should be very sure that he can safely cover all the aspects of performanceand attitudinal development that a well-run performance appraisals system is naturallydesigned to achieve.There are various ways of conducting performance appraisals, and ideas change overtime as to what are the most effective appraisals methods and systems. Some peopleadvocate traditional appraisals and forms; others prefer 360-degree-type appraisals;others suggest using little more than a blank sheet of paper. 29
  30. 30. In fact performance appraisals of all types are effective if they are conducted properly,and better still if the appraisal process is clearly explained to, agreed by, the peopleinvolved.Managers need guidance, training and encouragement in how to conduct appraisalsproperly. Especially the detractors and the critics. One should help anxious managers(and directors) develop and adapt appraisals methods that work for them and also beflexible. There are lots of ways to conduct appraisals, and particularly lots of ways todiffuse apprehension and fear - for managers and appraisees alike.Particularly - encouraging people to sit down together and review informally and often -this removes much of the pressure for managers and appraisees at formal appraisaltimes.Leaving everything to a single make-or-break discussion once a year is asking for troubleand trepidation.One should look out especially for the warning signs of negative cascaded attitudestowards appraisals. This is most often found where a senior manager or director hatesconducting appraisals, usually because they are uncomfortable and inexperienced inconducting them. The senior manager/director typically will be heard to say thatappraisals dont work and are a waste of time, which for them becomes a self-fulfillingprophecy. This attitude and behavior then cascades down to their appraises (all the peoplein their team) who then not surprisingly also apply the same no good - not doing itnegative attitude to their own appraisals responsibilities (teams). And so it goes. A nogood - not doing it attitude in the middle ranks is almost invariably traceable back to asenior manager or director who holds the same view. As with anything, where peopleneed help doing the right thing, one must help them.All that said, performance appraisals that are administered without training (for thosewho need it), without explanation or consultation, and conducted poorly will be counter-productive and are wastes of everyones time. 30
  31. 31. Well-prepared and well-conducted performance appraisals provide unique opportunitiesto help appraisees and managers improve and develop, and thereby also the organizationsfor whom they work.Just like any other process, if performance appraisals arent working, one should notblame the process, but should ask oneself whether it is being properly trained, explained,agreed and conducted. An Effective Performance AppraisalAside from formal traditional (annual, six-monthly, quarterly, or monthly) performanceappraisals, there are many different methods of performance evaluation. The use of anyof these methods depends on the purpose of the evaluation, the individual, the assessor,and the environment.The formal annual performance appraisal is generally the over-riding instrument whichgathers together and reviews all other performance data for the previous year.Performance appraisals should be positive experiences. The appraisals process providesthe platform for development and motivation, so organizations should foster a feeling thatperformance appraisals are positive opportunities, in order to get the best out of thepeople and the process.In certain organizations, performance appraisals are widely regarded as something ratherless welcoming (bollocking sessions is not an unusual description), which provides abasis only on which to develop fear and resentment, so never, never, never use a staffperformance appraisal to handle matters of discipline or admonishment, which shouldinstead be handled via separately arranged meetings. 31
  32. 32. Types of performance and aptitude assessments, including formalperformance appraisals:  Formal annual performance appraisals  Probationary reviews  Informal one-to-one review discussions  Counseling meetings  Observation on the job  Skill- or job-related tests  Assignment or task followed by review, including secondments (temporary job cover or transfer)  Assessment centers, including observed group exercises, tests presentations, etc.  Survey of opinion of others who have dealings with the individual  Psychometric tests and other behavioral assessments  Graphology (handwriting analysis)None of these methods is mutually exclusive. All of these performance assessmentmethods can be used in conjunction with others in the list, depending on situation andorganizational policy. Where any of these processes is used, the manager must keep awritten record, and must ensure agreed actions are followed up. The notes of all reviewsituations can then be referred to at the formal appraisal. 32
  33. 33. Holding regular informal one-to-one review meetings greatly reduces the pressure andtime required for the annual formal appraisal meeting. Holding informal reviews everymonth is ideal all staff. There are several benefits of reviewing frequently and informally:  The manager is better informed and more up-to-date with his or her peoples activities (and more in touch with what lies beyond, e.g., customers, suppliers, competitors, markets, etc)  Difficult issues can be identified, discussed and resolved quickly, before they become more serious.  Help can be given more readily - people rarely ask unless they see a good opportunity to do so - the regular informal review provides just this.  Assignments, tasks and objectives can be agreed completed and reviewed quickly - leaving actions more than a few weeks reduces completion rates significantly for all but the most senior and experienced people.  Objectives, direction, and purpose is more up-to-date - modern organizations demand more flexibility than a single annual review allows - priorities often change through the year, so people need to be re-directed and re-focused.  Training and development actions can be broken down into smaller more digestible chunks, increasing success rates and motivational effect as a result.  The fear factor, often associated by many with formal appraisals, is greatly reduced because people become more comfortable with the review process.  Relationships and mutual understanding develops more quickly with greater frequency of meetings between manager and staff member.  Staff members can be better prepared for the formal appraisal, giving better results, and saving management time.  Much of the review has already been covered throughout the year by the time comes for the formal appraisal.  Frequent review meetings increase the reliability of notes and performance data, and reduce the chances of overlooking things at the formal appraisal. 33
  34. 34. Performance Appraisals ProcessFor any organization to make it appraisal system effective, one must follow the under-mentioned procedure, which helps to make an appraisal system effective. Prepare - prepare all materials, notes agreed tasks and records of performance, achievements, incidents, reports etc - anything pertaining to performance and achievement - obviously include the previous performance appraisal documents and a current job description. A good appraisal form will provide a good natural order for proceedings, so use one. If your organization doesnt have a standard appraisal form then locate one, or use the template below to create one, or download and/or adapt the appraisal forms from this page. Whatever is used, the necessary approval from the organization should be ensured, and understand how it works. Paperwork should be organized to reflect the order of the appraisal and the sequence of items to be covered should also be written down. If the appraisal form includes a self-assessment section and/or feedback section (good ones do) this is passed to the appraisee suitably in advance of the appraisal with relevant guidance for completion. Part of the preparation should also consider whole- person development - beyond and outside of the job skill-set - as might inspire and appeal to the appraisees. Many people are not particularly interested in job skills training, but will be very interested, stimulated and motivated by other learning and development experiences. The organization should know what the organization‘s people are good at outside of their work. Peoples natural talents and passions often contain significant overlaps with the attributes, behaviours and maturity that are required and valued in the workplace. The organization should use its own imagination in identifying these opportunities to encourage whole-person development and will find appraisals can become very positive and enjoyable 34
  35. 35. activities. Appraisals are not just about job performance and job skills training. Appraisals should focus on helping the whole person to grow and attain fulfillment. Inform - inform the appraisee – ensures that the appraisee is informed of a suitable time and place (change it if necessary), and clarify purpose and type of appraisal - the appraisee should be given the chance to assemble data and relevant performance and achievement records and materials. If the appraisal form does not imply a natural order for the discussion then provide an agenda of items to be covered. Venue - ensures a suitable venue is planned and available - private and free from interruptions - observes the same rules as with recruitment interviewing - avoids hotel lobbies, public lounges, canteens. Privacy is absolutely essential (it follows also that planes, trains and automobiles are entirely unsuitable venues for performance appraisals). Layout - room layout and seating are important elements to prepare also – the organization should not simply accept whatever layout happens to exist in a borrowed or hired room. Layout has a huge influence on atmosphere and mood - irrespective of content, the atmosphere and mood must be relaxed and informal - barriers should be removed. Introduction - the appraisee should be relaxed. It is the manager‘s responsibility to create a calm and non-threatening atmosphere. He should simply explain what will happen - encourage a discussion and as much input as possible from the appraisee - tell them its their meeting, confirm the timings, especially finishing time. Asking the appraisee, if there are any additional points to cover and note them down so as to include them when appropriate, is also appreciable. 35
  36. 36.  Review and measure - reviewing the activities, tasks, objectives and achievements one by one, keeping to distinct separate items one by one - avoid going off on tangents or vague unspecific views. If the appraiser has done his preparation correctly, he will have an order to follow. If something off subject comes up then he must note it down. He should concentrate on hard facts and figures, solid evidence - avoid conjecture, anecdotal or non-specific opinions, especially about the appraisee. Being objective is one of the greatest challenges for the appraiser - as with interviewing, resist judging the appraisee in his own image, according to his own style and approach - facts and figures are the acid test and provide a good neutral basis for the discussion, free of bias and personal views. For each item agree a measure of competence or achievement as relevant, and according to whatever measure or scoring system is built into the appraisal system. This might be simply a yes or no, or it might be a percentage or a mark out of ten, or an A, B, C. Reliable review and measurement requires reliable data - if he doesn‘t has the reliable data, he cant review and he might as well re-arrange the appraisal meeting. If a point of dispute arises, he must get the facts straightened out before making an important decision or judgment, and if necessary must defer to a later date. Agree an action plan - An overall plan should be agreed with the appraisee, which should take account of the job responsibilities, the appraisees career aspirations, the departmental and whole organizations priorities, and the reviewed strengths and weaknesses. The plan can be staged if necessary with short, medium and long-term aspects, but importantly it must be agreed and realistic. Agree specific objectives - These are the specific actions and targets that together form the action plan. As with any delegated task or agreed objective these must 36
  37. 37. adhere to the SMARTER rules - specific, measurable, agreed, realistic, time-bound, enjoyable, recorded. If not, dont bother. The objectives can be anything that will benefit the individual, and that the person is happy to commit to. When helping people to develop, you are not restricted to job- related objectives, although typically most objectives will be.Agree necessary support - This is the support required for the appraisee to achieve theobjectives, and can include training of various sorts (external courses and seminars,internal courses, coaching, mentoring, secondment, shadowing, distance-learning,reading, watching videos, attending meetings and workshops, workbooks, manuals andguides; anything relevant and helpful that will help the person develop towards thestandard and agreed task. Also, the appraiser must consider training and development that relates to whole- person development outside of job skills. This might be a hobby or a talent that the person wants to develop. Developing the whole person in this way will bring benefits to their role, and will increase motivation and loyalty. The best employers understand the value of helping the whole person to develop. He should be careful to avoid committing to training expenditure before suitable approval, permission or availability has been confirmed - if necessary discuss likely training requirements with the relevant authority before the appraisal to check. Raising false hopes is not helpful to the process. 37
  38. 38.  Invite any other points or questions - makes sure to capture any other concerns. Close positively – The appraiser should thank the appraisee for their contribution to the meeting and their effort through the year, and commit to helping in any way he can. Record main points, agreed actions and follow-up – The appraiser must swiftly follow-up the meeting with all necessary copies and confirmations, and ensure documents are filed and copied to relevant departments, (HR, and his own line manager typically).Appraisals Timing With Pay Reviews, Performance Awards, And TrainingPlanningSome people advocate separating appraisals from pay review; however this does notmake sense in organizations which require staff to be focused on their contribution toorganizational performance, especially where there are clear accountabilities andmeasures (which in my view should apply in all organizations).Organizations rightly or wrongly are geared to annual performance, and the achievementof a trading plan. This cascades to departments, teams and individuals, so it makes senseto assess people over a time period that fits with what the organization is working to. Putanother way, its not easy to appraise someone on his or her years performance half waythrough the year. Transparency and accountability are prerequisites for proper assessmentand appraisals.Arguably best practice is to schedule appraisals close to trading year-end, when year-endresults and full year performance - for individuals and departments and organizations - 38
  39. 39. can reliably be predicted. By holding appraisals at this time, and staff knowing thatappraisals are focused on this trading period, peoples thoughts and efforts can beconcentrated on their contribution towards the organizations annual trading plan, whichis a main appraisals driver and output (as well as individual development of course).Holding appraisals after year-end means that people start the year without formal agreedobjectives, and also creates bigger delays for financial and payroll departments in theirtask to process pay awards and adjustments.Departmental, team and individual objectives provide the context for the appraisal,linking clearly to performance bonus and performance-based pay awards, the rationalefor which needs to be transparent and published prior to the start of the year to whichthey relate, for the full benefit and effect on staff effort to be realized.Pay review would also coincide with the trading year, which makes sense from theplanning and budgeting perspective. The business is in a position to know by the close ofthe final quarter what the overall pay review position is because the rationale has alreadybeen (it jolly well should have been) established and year-end financials can be predicted.Moreover the next years trading plan (at least in outline) is established, which givesanother useful context for appraising people, especially those (most staff hopefully) whohave contributed to the planning process (i.e., committed as to what they can do for thecoming year, targets, budgets, staffing levels, priorities, objectives, etc).The appraising managers can therefore go into appraisals fully briefed and prepared todiscuss and explain the organizations overview results and financials to the appraises.And the appraises can see results and think in terms of their full year performance andcontribution to corporate results, plus what they plan for next year, which provides thebasis of the aims and objectives to be reviewed through the coming year and at the nextyears appraisal. 39
  40. 40. THEORY OF PERFORMANCE APPRAISALAfter an employee has been selected for a job, has been trained to do it and has workedon it for a period of time, his performance should be evaluated. Performance Appraisal isthe process of deciding how employees do their jobs. Performance here refers to thedegree of accomplished of the tasks that make up an individual‘s job. It indicates howwell an individual is fulfilling the job requirements.―Performance Appraisal is a method of evaluated the behaviour of employee in the workspot, normally including both the quantitative and qualitative aspects of job performance.It is a systematic and objective way of evaluating both work-related behaviour andpotential of employees. It is a process that involves determining and communicating to anemployee how he or she is performing the job and ideally establishing a plan ofimprovement.‖What is Performance Appraisal? Identification: Means determining what areas of work the manager should be examining when measuring performance essentially focusing on performance that affects organizational success. Measurement: Entails making managerial judgment of how good or bad employee performance was. Management: Appraisal should be more than a post-mortem examination of post events, criticizing or praising workers for their performance in the preceding year. Instead, it must take a future oriented view of what workers can do to realize their potential. 40
  41. 41. PERFORMANCE APPRAISAL AS PMS AT HINDUSTAN AERONAUTICS LIMITED ORGANOSYS LTDPERFORMANCE MANAGEMENT SYSTEM IS ALL ABOUT:  Establishing a shared understanding about what is to be achieved, and it is to be achieved  A continuous process of everyday actions and behaviors, which individuals take to manage performance improvement in themselves and others  Increasing the probability of achieving job related success WHY REVAMP THE PMS AT HINDUSTAN AERONAUTICS LIMITED?  Top Management realized that PMS is a weak link at Hindustan Aeronautics Limited.  Grievance against the PMS very high among employees.A need was felt to make changes in old PMS in Hindustan Aeronautics Limited andfor this purpose “GROW TALENT COMPANY LIMITED” did a survey inHindustan Aeronautics Limited to know the opinion of employees about PMS sothat necessary changes can be made in PMS and new PMS can be revamped inHindustan Aeronautics Limited. 41
  42. 42. A workshop was organized to make Hindustan Aeronautics Limited Organosys’employees effective trainers in the Performance Management System (PMS) andsimilar training programs.OBJECTIVES AND AGENDA OF THE WORKSHOP“To make myself redundant” was the reply of a manager when asked for hisprofessional objective. Grow Talent also believes in the same – to help people andorganizations realize their potential and develop internal consulting skill.The train the trainer workshop is aimed at developing Hindustan Aeronautics LimitedOrganosys’ employees to become effective trainers in the Performance ManagementSystem (PMS) and similar training programs.Each of the employees is aware of certain personal challenges, which obstruct you ineffective communication/ program delivery. We encourage you to come up with apersonal agenda in improving these skills.THE LEARNING OBJECTIVE OF THE TRAIN THE TRAINERWORKSHOP IS:“Participants will be able to conduct training programs in PMS. They will acquireknowledge of the PMS training design, training methods and skills required fordelivering a PMS training program.” 42
  43. 43.  As members of the core group engaged in carrying the message of PMS activities, to the members of the organization, all employees will be involved in imparting new learning.  In this endeavor employees will be playing a key role in terms of identifying the development needs and the inputs required by the team, developing effective vehicles for imparting these inputs and creating continuous learning communities.  This workshop on ―Train the Trainer” will develop us to carry out the PMS awareness programs. The program will provide us with an opportunity to examine the values, process and approaches in learning with an objective of understanding our role as trainers and developing skills required for creating learning communities and delivering learning experiences effectively.ROLES AND RESPONSIBILITIES:1. APPRAISEE  To ensure that goal setting is SMARTS and completed within the timelines.  To capture real time data in the critical incidents diary.  To conduct self appraisal with critical incidents and data wherever possible.  To seek and accept periodic feedback.  The appraise can view the appraisal done by the appraiser(s) however the rating can be viewed only after it has been normalized by the harmonization committee.  To take training inputs inputs for self improvement.  To voice a concern in case one is not satisfied with the appraisal process. 43
  44. 44. 2. APPRAISER  Goals and targets are realistic.  To ask questions of understanding and help appraise to reflect better in round one appraisal.  To provide his perspective on the appraisal to the Reviewer.  To discuss appraisals in the Harmonization Committee; get feedback and finalize rating.  To give consolidated feedback to appraise to provide consistency feedback on KRA.  Justify exceptionally high and low ratings.3. REVIEWERReviewer provides inputs on the appraisal forms duly filled by the appraisee andappraiser. He ensures there has been no bias, positive or negative, in the appraisal. Ifneeded he can seek inputs from internal customers/ suppliers once again (may/ may notbe the ones contacted by the appraiser). He also checks for internal parity in ratings.4. INTERNAL CUSTOMER/ SUPPLIER  To bring in perspective from a customer‘s/ supplier‘s point of view.  To provide unbiased and balanced inputs on an appraisee‘s performance.5. HEADS OF DEPARTMENTS  To provide normalized ratings to HR.  All escalated cases of grievances after Appraisal process to be sent to HR. 44
  45. 45. 6. HR  All escalated cases of grievances to be studied and compiled by HR.  HR to escalate grievances cases further to the Harmonization Committee.7. HARMONIZATION AND TALENT REVIEW COMMITTEE  Decide on rewards/ kitty etc.  Moderate inter- functional issues/ ratings/ inconsistencies.  Separate Harmonization & Talent Review committee for DGMs and above. Executive Directors and President HR to be a part of the committee. Business Unit level moderation to be done involving leadership team at the unit.  Enforcing bell curve for rating, to be clearly communicated to all appraisers at Manager Level and above. This is not applicable for specialist functions.PMS AT HINDUSTAN AERONAUTICS LIMITED- KEY OBJECTIVES  A very critical aspect of the new Performance Management System is Performance Planning. Typically, in most organizations, employees are put on the job without giving them a perspective of the importance of their job and its linkage to the larger scheme of things. Also, their opinion on whether or not they would be able to accomplish the task assigned to them is never sought, and neither are they asked about the resources that would enable them to succeed. This forced allocation of work affects the employees in two ways. Firstly, it does not bring about a natural buy- in from the employees. Secondly, it does not take into consideration an employee‘s strength, areas of development and interests, which may render the task all the more difficult to achieve. To avoid this, the system focuses on proper performance planning for the organization, which will be cascaded down to the individuals. 45
  46. 46.  The most remarkable feature of performance planning in the new system is the horizontal and vertical alignment of individual goals to those of the organization. This enables employees to appreciate the way in which they are linked with the Others in the organization, and how one‘s contribution helps others and is also helped by others. Horizontal and vertical alignment of goals also brings to the fore, any overlaps that might exist on the organization. The new system would facilitate accountability in the organization because of the following reasons:  Participative goal setting would ensure ownership by the employees.  One has the opportunities to articulate the resources and support required to achieve his/ her goals. This creates a scope for negotiation between employee and supervisor and/ or his/ her peer group and thus is likely to make goals more realistic. The Performance Management System throws out the areas of development for employees, which should be addressed so as to ensure the same mistakes are not repeated the next time. HR should thus, utilize this system to identify the learning needs of people. Performance Management System cannot succeed as a stand alone system. It reveals important insights, which should keep getting linked to the other HR systems. Training is an example. Rewards and Recognition is another very obvious example. Career or Succession planning would also use inputs from Performance Management System. Likewise, most HR systems should be linked to it. 46
  47. 47. THE CYCLE OF PERFORMANCE MANAGEMENT 1 Establish Mutual Expectations 2 6 Train and Observe & Develop Measure Performance Management Cycle 5 3 Recognize and Guide, Coach and Reward Correct 4 Evaluate, Feedback & Document Figure (2) Cycle of Performance Management1. ESTABLISHING MUTUAL EXPECTATION- This makes appraisees cognizantof what is expected of them, and also gives them an opportunity to express what theyexpect from their supervisors, peers and sub- ordinates in order to successfully meetexpectations. This stage can easily be called the foundation of PerformanceManagement. If this stage is not handled effectively, it would lead to a mismatch ofthe definition of ―Performance‖ in the minds of the appraiser and the appraisee, whichwould become evident towards the end of the cycle when the appraisal is done. 47
  48. 48. 2. OBSERVE AND MEASURE- This would enable the appraisee to seek guidancefrom the appraiser wherever required, and accelerate his progress towards his goals.This would also keep the appraiser informed of the developments, and prevent anyrude shocks to both of them at the time of appraisal.3. GUIDE, COACH AND CORRECT- Appraiser should guide, coach and correct theappraisee through the year, so as to facilitate his accomplishing targets. The appraisershould not wait for the annual appraisal to point out the appraisee‘s mistakes andprovide guidance. This is a key part of his responsibilities as a supervisor, and shouldbe done on a continuous basis.4. EVALUATE, FEEDBACK AND DOCUMENT- It is also expected of theappraiser to evaluate the progress made by the appraisee after a pre-defined period(mid year review, annual Review etc), and provide him constructive anddevelopmental feedback. This feedback should be documented in the system, andaccessible for future use.5. REWARD AND/ OR RECOGNITION- After having gone through the entirePerformance Management Cycle, it is natural for the appraisees to expect some“Reward and/ or Recognition” for their efforts and performance. This can bemonetary i.e. in the form of performance pay, bonus, increments etc; or non-monetary i.e. Best performer trophy, employee of the year award etc. Of course, itcan be a combination of the two. Reward and Recognition is an obvious fall- out ofthe Performance Management System, and ensures that the motivation levels in theorganization are maintained. Also, it is critical for any organization to be perceived asfair by their employees. This again reinforces the need for a visible linkage ofPerformance Management System with the Rewards and Recognition framework. 48
  49. 49. 1. TRAIN AND DEVELOP- Lastly the Performance Management System brings out a lot of data with respect to the learning needs of individuals. In today‘s era, when Capability Building has become the key to retain employees, no organization can afford to overlook this data. Appraisee wants to know what the organization would do to bridge the gap between expectation and performance. Therefore training and development also becomes a fall- out of the Performance Management System. This would not only keep the employee morale upbeat, but also equip them to give better performance in coming years. 49
  50. 50. PMS PROCESS FLOW1 Organization KRA Setting – Strategic Planning/ Annual Budget setting Performance Planning Individual KRA Setting2 Performance Data capturing Monitoring Mid Year Self-Appraisal Review Feedback Discussion With Appraiser 3 Performance Modification of goals Review Self-Appraisal Annual Appraisee / Appraiser seeks feedback from Appraisal Internal Customers Performance Dialogue with Appraiser 1 Performance Dialogue with Appraiser 2 Reviewer Harmonization & Talent Review Committee Feedback & Coaching Session 4 5 6 Reward & Learning & Potential Recognition System Development Development System System Figure (3) PMS Process Flow 50
  51. 51. FOLLOWING ARE THE THREE KEY STAGES OF THE SYSTEM: 1. Performance Planning 2. Performance Monitoring 3. Performance ReviewThe boxes 4, 5 and 6 shows the other HR systems which draw inputs from thePerformance Management System.PERFORMANCE PLANNING- Performance Planning is all about goal setting – for theorganization as well as individuals. A goal can be defined as a statement of intent. It isbasically a commitment from the appraisee on what he would achieve within a specifiedtime period. Of course, this commitment cannot be in isolation of what the organization,and the appraisee‘s department, commits to achieve within the said time period.Therefore, there has to be a clear linkage between the goals of the organization‘s goalsand the goals of each and every employee of the organization. This would start fromorganizational level and flow to the individuals. In other words, the first step would be toarticulate what the organization wants to achieve in the given time period, and what arethe strategic initiatives it would undertake to achieve the same. Once, this is frozen, onlythen would the individuals formalize the goals. This would enable each and everyemployee to see the connection between his goals and the goals of the organization.Performance Planning is all about goal setting- for the organization as well as individuals. 51
  52. 52. A GOAL is a statement of intent, describing situation or condition that will be achieved in a specific time frame. Goals tell a person what he/she needs to achieve and how much effort needs to be extended. Annual Business Planning  Cascade of BU/ Functional level score card through a one day BU/ Functional level Balanced exercise Scorecards  BU Heads and Function Heads set their individual KRAs in the Cascade of the scorecards using Balanced Scorecard format (only the Hoshin Kanri Approach upto Sec In Charge level)  These KRAs further cascaded Identify significant Internal using Hoshin Kanri approach Customer/Supplier  Service Level Agreements between Business Unit and/or Define Service Level Functions Agreements between departments Figure (4) TOOLS OF PERFORMANCE PLANNING1. BALANCED SCORE CARD-Developed in the early 1990s by Dr. Robert Kaplan and David Norton, Balanced Score card is a management system that enables organizations to clarify their vision and translate them into action. The balanced scorecard retains traditional financial measures and also provides a clear prescription as to what companies should measure in order to ‗balance‘ the 52
  53. 53. financial perspective. Financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long- term capabilities and customer relations were not critical for success. The balanced score card, thus, suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these: i) THE FINANCIAL PERSPECTIVE- Financial success will always be a priority, and managers will do whatever necessary to achieve it. This can be measured through increase in revenue, decrease in costs, profitability, return on investments etc. ii) THE CUSTOMER PERSPECTIVE- Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good. iii) THE INTERNAL BUSINESS PROCESS PERSPECTIVE- This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running. iv) THE LEARNING AND GROWTH PERPECTIVE- This perspective includes employee training and corporate culture attitudes related to both individual and corporate self- improvement.The Balanced Scorecard would be applicable to employees above Section In Charge levelonly. This is because at lower levels, a balanced approach may not be very impact. ForSection In Charges and above, it is mandatory to have at least one KRA in each of thefour Balanced Scorecard perspectives. The weightage allotted to any perspective cannotbe less than 10%. 53
  54. 54. 2) VERTICAL ALIGNMENT OF GOALS- HOSHIN KANRI- As discussed above, theorganization goals would be cascaded down to the individual level as per the newperformance management system. The methodology used for this is called ―Hoshinkanri‖ which is a well known approach for strategy deployment. This methodology veryvisibly links the goals of the organization to the goals of the individual.According to this approach, there are four critical parts of a goal statement: i) What needs to be done ii) How would it be done iii) Who would do it iv) By when would it be doneHoshin Kanri cascades the organizational goals to individuals through converting the―How‘s‖ of one level to be the ―What‘s‖ of the second level and so on.  An employee can have 6 – 10 KRAs.  KRAs can be team based also, if it is felt that an individual would not be able to take accountability for a specific initiative.  Each KRA would have a weightage of minimum 5% and maximum 30%.  The total weightage of any Balanced Scorecard perspective cannot be less than 10%.  The goals of the organization would be set in the month of May every year. In that respect, the month of May would be designated as the ―Goal setting Month‖.  For any person joining the organization in the months of June – December, his / her supervisor and entered in the automated system, for it to be considered final. 54
  55. 55. SMARTS GOAL SETTING: MEASURA BLE SPECIFIC AGREED SMARTS GOALS REALISTIC STRETCH TIME BOUNDGoals cannot be vague statements. Each and every goal needs to pass the SMARTStest, which is an acronym for:S- SpecificM- MeasurableA- AgreedR- RealisticT- Time BoundS- Stretch 55
  56. 56. 3) IDENTIFYING KEY INTERNAL CUSTOMERS/ SUPPLIERS- It has the followingimportant points:i) Appreciation of inter-dependencies between departments and eliminates the risk ofappraisal bias to a large extent.ii) Identification of key internal customers/ suppliers during Goal setting processiii) Their feedback documented during Mid Year as well as Annual Appraisaliv) Due consideration given to their feedback while deciding on the final rating for theappraisee.4) HORIZONTAL ALIGNMENT THROUGH SERVICE LEVEL AGREEMENTS-Service level agreements is a formal negotiated agreement between two parties. Typicallyit is a contract that exists between customers and their service provider, or between twoor more service providers.SLAs serve the purpose of acknowledging inter- dependencies between Business unitsand functions. Contracting of SLAs provide a forum to table grievances anddisappointments from other units/ departments, which an opportunity to collectivelyarrive at solutions to the stated problems.The service level Agreements would be contracted at the Business Unit/ Function Headlevel. However, the entire Business Unit and/ or Function would be bound by the SLA.Adherence to SLAs would have 5% weightage in the Performance Management System. 56
  57. 57. ASSIGNMENT OF WEIGHTAGES Category Goals Weightage Financial Goal #1 10% Goal #2 20% Customer Goal #3 20%Internal Process Goal #4 10% Goal #5 10% Learning & Goal #6 15% Growth Goal #7 15% 100%C Table (2) Assignment of Weightage At the time of goal setting, there are five simple checks that need to be carried out, to ensure that the goals are made in the right fashion: 1. No. of goals between 6 – 10 2. At least one goal in all four perspectives. 3. The sum of weightage to be equal to 100 4. All goals to have minimum 5% and maximum 30% weightage. 5. All perspectives to have a weightage of at least 10% 57
  58. 58. Now that the goals meet the basic criteria, a SMARTS check needs to be conducted onthe goals by the appraiser/ HR. This is to ensure objectivity and common understandingin the minds of the appraisee and the appraiser at the time of appraisals and feedback.PERFORMANCE MONITORING- The system recommends continuous performancemonitoring, completely backed by data. The system has two critical aspects to it- KRAsand Competencies. Performance needs to be monitored on both these aspects. Both theappraiser and the appraisee should maintain records of the appraisee‘s exceptionalachievements or slip- ups and positive and negative behaviors displayed by them throughthe year. This would address the Recency Error in appraisals – where the appraisal forwhole year is colored by the most recent performance of the appraisee.For this purpose, a critical incident diary would be accessible online to both the appraiserand the appraisee.Both of them can record positive or negative instances relating toKRAs and/ or competencies. The appraiser and the appraisee should discuss this diary inperson every month to take stock of things on a regular basis and facilitate theachievement of goals by the appraisee. In addition, it would also act as a memoryrefresher at the time of midyear and annual appraisals. 58
  59. 59. PERFORMANCE REVIEW- Performance review is sub divided into two parts: 1) Midyear review 2) Annual review 1) MID YEAR REVIEW HR to initiate reminders for the review  Appraiser discusses appraisee’s progress process and provides feedback  Appraiser and appraisee agree on a corrective action plan in case progress is Appraisee completes self – appraisal below expectations  Appraiser and appraisee may decide to Mid Year Feedback by 2 Internal change / modify the KRA’s on the basis of Customers change in business conditions. Any such change will need to be validated by approving authority Review discussion between appraisee  Business Unit Head is the Approving and appraiser authority for the changes in KRAs Figure (5) Mid Year ReviewThis is an opportunity for the appraiser and the appraisee to meet up in the middle of theyear and take stock of how things are going. This would also be the time to realisticallyevaluate the goals, bearing in mind the business priorities, and make additions and/ ordeletions in the goals if required. 59
  60. 60. 2. ANNUAL REVIEW- HR to initiate reminders for annual appraisal • Performance data to be Appraisee to complete self – appraisal recorded and tracked by appraisee and updated on IT Appraiser has a discussion with appraisee to understand system appraisee’s perspective and rationale behind self appraisal • Potential Assessment through ratings on Competency Appraiser to seek inputs from 2 internal customers Framework • Harmonization & Talent Appraiser notes his/her rating and comments. Second Review Committee to Appraiser (if any) also fills in rating & comments comprise of EDs and Head independently HR Reviewer seeks inputs from the internal customers (if • All escalated cases of required) and the appraiser (s) and mentions his comments grievances to be sent to HR. HR to reconvene the Harmonization and Talent Harmonization & Talent Review Committee study and rate all Review Committee for all reviews. The ratings of the committee will be final grievance issues for the year • BU and Function Heads to Communication of the final rating to the appraisee by the provide forced ranking of appraiser with detailed feedback and joint sign off on a their team to HR developmental plan Figure (6) Annual ReviewThe annual appraisal would involve evaluation of an appraisee at four levels, to ensurethere is no bias in the appraisal. First level would be the appraisee himself/ herself;second would be his appraiser (s) along with the internal/ external customers theappraisee interact with; third would be a Reviewer, who would typically be a BusinessUnit or Function. Head; and finally a Harmonization and talent Review Committee,which would comprise the Executive directors and the Head HR. On completion of thisprocess, ratings would be communicated to the appraisee and detailed feedback would beprovided. 60
  61. 61. RATING SCALEEach KRA would be rated on a scale of 1 to 6, 1 being the lowest and 6 being the highest.The scale is defined as shown: 6 – Consistently and significantly exceeds expectations 5 – Significantly exceeds expectations 4 – Exceeds expectations 3 – Meets expectations 2 – Doesn’t meet expectations1 – Consistentlydoesn’t meetexpectations Figure (7) Rating Scale 61
  62. 62. SCORING OF KRAs We are now familiar with the 6 point rating scale to be used for scoring of goals. Now, at the stage of Annual Appraisal, Let us see how the goals are scored. The score arrived at is a multiplication of the weight with the rating. The bottom most cell gives the formula for the overall rating. It is calculated by adding the score (305), and dividing them by the sum total of weightage i.e. 100%, to get an overall score of 3.05.Category Goals Weightage Rating ScoreFinancial Goal #1 10% 3 30 Goal #2 20% 4 80Customer Goal #3 20% 3 60 Internal Goal #4 10% 2 20 Process Goal #5 10% 4 40Learning & Goal #6 15% 2 30 Growth Goal #7 15% 3 45 100% = 305/100 = 3.05 Table (3) Scoring of KRAs 62
  63. 63. MODIFICATION OF KRAsTHERE CAN BE THREE ALTERNATIVES FOR MODIFYING KRAs: 1. Addition of new KRA(s) 2. Deletion of KRA(s) 3. Addition and Deletion of KRA(s)IN ALL THESE CASES:  The sum of weightages should not exceed 100%. Therefore, a revision of the weightages of other KRAs would be required.  Whenever a KRA is dropped or accomplished before time, the supervisor‘s feedback and rating is documented.  At the of Annual appraisal rating. Weightages for dropped goals are also considered (Ideally, weighted average method should be followed, but since it complicates the system without having any significant impact, it has been avoided.)  In the event of modification in KRAs, the concerned Business Unit/ Function head‘s approval is required. This is because change in one person‘s KRAs might impact many others. 63
  64. 64. MODIFICATION IN KRAs – EXAMPLECategory Goals Weight Rating Score ageFinancial Goal #1 10% 3 30 Goal #2 20% 4 80Custome Goal #3 20% 3 60 r Goal #8 20% 2 40Internal Goal #4 10% 2 20Process Goal #5 10% 4 40Learning Goal #6 15% 2 30 & Growth Goal #7 15% 3 45 = 345/120 =2.88 Table (5) Modification in KRAs examples 64