Public Sector Banks In IndiaBanking services is one sector where a great degree of attention is being paid to PerformanceAppraisal Systems. Several of the public sector banks (PSBs) have changed their PAS or arein the process of changing them. State Bank has recently adopted an open system ofappraisal. Its associate banks are likely to follow the same after detailed experiences of StateBank of India are available. Several banks also have self-appraisal as a part of performanceappraisal, although mostly such self-appraisal is more of a communication of achievements.Few of Public Sector Banks:Allahabad BankIt has introduced a system that aims in helping officers to identify their strengths andweaknesses and encourage improvement of performance on the job.Indian Overseas BankIt has a system in which branch manager gives self appraisal on business growth, customerservice, internal administration and training requirements.Union Bank of IndiaIt has a appraisal system in which the reporting officer is required to assess each of hisappraise officers on technical, human skills and conceptual skills. All these are defined fordifferent categories of roles and the assessment has to be made on five-point scale.Punjab National BankIt has primarily, a development –oriented appraisal form. There are ten different formatsavailable for ten different categories of employees. The bank started the system with self-appraisal by appraise.Bank of BarodaEmployee performance management systemA new Performance Management system has been formulated and implemented for allofficers w.e.f. 2009-10 onwards. The new system enables a holistic approach to the issue ofmanaging performance and does not limit to only an appraisal. It starts from performanceplanning and Goal-setting and takes it forward into performance review discussions, feedbackand development. The new system is business-linked, highly objective and fully transparent,with individuals owning and managing their own performance themselves.
STATE BANK OF INDIAIntroduction to SBIThe evolution of State Bank of India can be traced back to the first decade of the 19thcentury. It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809. It wasthe first ever joint-stock bank of the British India, established under the sponsorship of theGovernment of Bengal. Subsequently, the Bank of Bombay (established on 15 April 1840)and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. Thesethree banks dominated the modern banking scenario in India, until when they wereamalgamated to form the Imperial Bank of India on 27th January 1921An employee enters the bank after he qualifies the entrance exam and interview. The letter ofpermanent employee is given only after successful completion of 6 months of service in thebank. The person may start with a clerical post and move up the ladder based on hisperformance. The position that comes after clerk cub be that of officer, Accountant, BranchManager, Chief Manager, Assistant General Manager, Deputy General Manager and GeneralManager. The small branch of bank has 1 Branch Manager, 1 Officer and 3 clerks.The number of clerks may group up to 78 in large branches.If the work tenure of employee comes gender 1-12 years, he is called assistant or computeroperator. For 13-19 years, he is called Senior Assistant. Service tenure for more than 20 yearshe is called special assistant. After 23 years of his service he is called special assistant. Theauthority and decision making power increases as the employee moves up the ladder.Performance Appraisal Process at SBIIn State Bank of India, performance appraisal is done on yearly basis. It is carried out tojudge the performance of employees in correlation with the fulfillment of goals, mission andvision of the bank. The immediate supervisor starts the process of performance appraisal. Hisobservations regarding the employee are put in written and forwarded to the Branch Manager.In many small branches, the branch manager may initiate the performance appraisal process.Every year it is the branch manager’s duty to send a letter regarding performance of theemployees to the higher authorities like Deputy General Manager and general Manager. Thehigher authorities then take appropriate decision regarding the service of the employees andthe amount of his contribution made towards the development of the business.Every employee is given a fixed monthly salary along with Dearness Allowance, House RentAllowance. City Compensatory Allowance and increments. Generally an employee is given 1increment annually. But if he is highly educated person in terms of his being a graduate orhas completed a professional course, then he is given 2 increments. The increment given mayvary from bank to bank as decided by the higher authority. The top management may alsohave the right to stop the increment for an employee in case he does not performsatisfactorily.During the process of Performance Appraisal, the employee is judged on the followingaspects and given points out of a total of 100 points.
Behavior: The behavior of employee towards customers, his subordinates, his superiors and his peer group members is noted. The behavior of employee towards minority customers is also kept in mind. Assistance and Implementation of Guidelines: The helping nature of employee is stressed upon in this criterion. The help that he provides to his subordinates and peer group is noted. Also the guidelines given to the employee by his senior members is seen. The employee is required to implement the guidelines and improve his service and performance. Critical Performances: The ability of an employee to perform outstandingly during difficult and significant situation is noted. Work Analysis: The ability of an employee to achieve his target, the business brought by him towards the organization is an important criterion that is observed during performance appraisal process. The additional efforts made by employee by moving out of his seat to develop the business are also noted. Responsibility and Risk Taking: The employee is marked for his performance and his response towards the responsibility of special task assigned to him. Also the risk taking ability of an employee is focused to take accurate decision in the future. Self Improvement and skills: the skills of an employee are given consideration in performance appraisal process. Also his interest for self development in the field of education and other courses are noted. Employee is always motivated to improve his skills and qualification for his personal development and also for the development of the organization as a whole. The employee who finds it difficult to perform is given special training in the area where he lacks required skills. Lastly the performance appraisal process also considers the sincerity, integrity, discipline, attendance and punctuality of the employee and his commitment towards the development of the business. Also customer feedback is also taken into consideration to judge the performance of the employee. The employees who do not perform well are given warning for improvement and provided required training. There is no demotion in SBI but the employee may not be given any additional benefits if he does not meet the expectations of the top management by his performance.Rewards and AppreciationThe employees with outstanding performance are recognized in the meeting held by the topmanagement. Rewards like monetary benefits, promotional benefits, best employeecertificate, bronze, silver, or gold medal, and many more additional benefits are given tomotivate the employees and recognize his efforts.To conclude, the current Performance Appraisal process in SBI uses a combination oftraditional and modern methods which includes straight ranking method, essay appraisalmethod, confidential reporting, critical incidents method, assessment centers, behaviorallyanchored rating scales, human resources accounting method and 360 degree performanceappraisal method.This performance appraisal is used as a reference by the top management to decide thepromotional worth of an employee. Generally for promotion purpose, the performanceappraisal letter for the past four years is referred from which the 3 best appraisals are chosen.Around 10% of weight age is given to performance appraisal of an employee. The
employees are ranked based upon the points they acquire in performance appraisal process. Aminimum of 60% marks are required for promotion purpose in the performance appraisalprocess. An employee who scores 90% or more is listed on merit basis. For those who scorebetween 60%-90% are given senior positions. The employees may be rated on a scale ofexcellent, very good, good, poor depending upon the points they receive in the performanceappraisal process. Also the Branch Manager is given points for the excellent work done bythe employees and the branch under his guidance.THE KEY FACTOR MISSING IN PUBLIC SECTOR BANKSMost of the performance appraisal system are annually conducted which are historic in natureand documents the past events. Study of the format of annual appraisal of many of the PSBsreveal that they are basically uniform in character with emphasis in historical events and littleor no importance for future growth. In comparison with the new generation banks andprogressive organizations, the appraisal system in PSBs, thus, is basically dysfunctional. ThePAS, as an important component of Performance Management System, is yet to be conceiveand made operational. But developing and implementing a PAS seems overdue and vitallyimportant.