University project performance appraisal(4)


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University project performance appraisal(4)

  2. 2. Acknowledgement“Vital to every operation is co-operation”. We really agree to this wonderfulquotation put forth by Mr. Frank Tyger. This project was successful due tothe co-operation extended by people who have truly contributed towards it.We gratefully acknowledge Prof. T V Rao who’s deep sharing and synergyhas moved us many levels beyond our own thinking. We want to thank themanagement of various companies who gave us the permission to conductresearch. We would also like to thank all the employees and HR executiveswho empowered us with valuable information. And finally to those whoselives and writings has come the wisdom of the ages. We have tried to learnfrom your legacy.AbstractAppraisal is a continuous process and done annually as a formal exercisebefore completion of the financial year. Appraisal has tremendousmotivational impact on people through meaningful feedback and is apowerful tool for recognition. This project explains performance appraisalsystem and tries to find out how efficiently Performance Appraisal isconducted. And if performance appraisal doesn’t meet its objective then,what are the factors causing failure. 2|Page
  3. 3. Objective of our researchMeasuring human performance has long been of interest to researchers and practitioners (Avery & Murphy, 1998, Bernardin & Beatty, 1984, and Hyde, 2001). One process in measuring and evaluating human capital that has received much attention in the literature is performance appraisal (Avery and Murphy, 1998). Performance appraisal research has three general streams (Bretz, et al. 1992). First, research has focused on developing and honing instruments to more accurately and objectively measure human performance (for examples see Tznier et al. 2001, Tznier, et al., 1993). Second, research has focused on supervisor and employee characteristics as sources of potential and actual bias in the performance appraisal ratings (Cleveland & Murphy, 1992; Dewberry, 2001; Ford et al., 1986; Feldman 1981). And third, research has focused on the uses and types of performance appraisal systems within organizations (Scott & Einstein, 2001, and Lam & Schaubroeck, 1999). Literature to date has helped organizations adopt more efficient and effective performance appraisal systems. It has helped administrators understand the challenges with objectively measuring behavior as well as some of the pitfalls associated with employee and supervisor bias in administering performance appraisals. Questions that have yet to be pursued in the literature include: what leads to performance appraisal system effectiveness and how can performance appraisal system effectiveness be defined? Research shows that the measures and systems we now have are not free from bias (Cleveland & Murphy, 1992; Dewberry, 2001; Scott & Einstein, 2001; and Lam & Schaubroeck, 1999), but, how can organizations understand if their performance appraisal system is effectively producing their desired results? This study is an initial attempt at answering these questions. 3|Page
  4. 4.  The various objectives of our research are as follows: To examine why an appraisal system is important. To study existing appraisal system in various organizations across sectors like BPO, IT & Telecom. To find the expectation of appraiser and appraisee To determine the satisfaction level of the appraisee To reveal the various loopholes in the appraisal system if any To find the consequences of an inappropriately conducted appraisal systemResearch Methodology The data source: Primary as well as Secondary. The research approach: Survey Method. The research instrument: Questionnaire. The respondents: The Managers & Employees of various organizations.The primary data was collected with the help of survey information. A concise questionnaire was prepared keeping in mind the information specifications. 4|Page
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  8. 8. INTRODUCTION 8|Page
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  10. 10. PERFORMANCEPerformance is synonymous with behaviour; it is what people actually do.Performance includes those actions that are relevant to the organizationalgrowth and can be measured in terms of each individual’s proficiency (levelof contribution). Effectiveness Performance refers to the evaluation ofresults of performance that is beyond the influence or control of theindividual. 10 | P a g e
  11. 11. Performance StandardsPerformance Standards. The benchmark againstwhich performance is measured. 11 | P a g e
  12. 12. PURPOSE OF PERFORMANCE APPRAISALAn HRD oriented performance appraisal is used as a mechanism to: i) Understand the difficulties of their subordinates and try to remove these difficulties & encouraging them to accept more responsibilities & challenges. ii) Understand the strength and weaknesses of their subordinates and help the subordinates to realise these. iii) Help the subordinates to become aware of their positive contributions.Potential Appraisal and DevelopmentIt is assumed under this system that the company is growing continuously.A dynamic and growing organization needs to continually review itsstructure and systems, creating new roles and assigning newresponsibilities. Capabilities to perform new roles and responsibilities mustcontinually be developed among employees.Feedback and Performance CoachingSupervisors in HRD system have the responsibility for ongoing observationand feedback to subordinates about their strengths and their weaknesses,as well as for guidance in improving performance capabilities.Career PlanningThe HRD philosophy says that people perform better when they feel trustedand see meaning in what they are doing. In the HRD system, corporategrowth plans should not be kept secret. Long-range plans for theorganization are made known to the employees. Most people want to knowthe possibilities for their own growth and career opportunities. Becausemanagers and supervisors have information about the growth plans of thecompany, it is their responsibility to transmit information to their 12 | P a g e
  13. 13. subordinates and to assist them in planning their careers within theorganization.TrainingTraining is linked with performance appraisal and career development.Employees generally are trained on the job or through special-in-housetraining programs.Organization DevelopmentThis function includes research to ascertain the psychological health of theorganization. This generally is accomplished by means of periodic employeesurveys. Efforts are made to improve organizational health through variousmeans in order to maintain a psychological climate that is conducive toproductivity.RewardsRewarding employee performance and behavior is an important part ofHRD. Appropriate reward is not only to recognize and motivate employees,but also communicate the organizations values to the employees. In HRDsystems, innovations and use of capabilities are rewarded in order toencourage the acquisition and application of positive attitudes and skills.Employee Welfare and Quality of Work LifeQuality-of-work-life programs generally focus on the environment within theorganization. HRD systems focus on employee welfare and quality of worklife by continually examining employee needs and meeting them to theextent feasible. 13 | P a g e
  14. 14. Basic Perform an ce Appraisal Process Conduct a Job Analysis (e.g., specify tasks and KSAs) Develop Performance Standards (e.g., define what is superior, acceptable, and poor job performance) Develop or Choose a Performance Appraisal System 14 | P a g e
  15. 15. Perfo rm an c e Appraisal Pro c ess Observation• Selective Attention• Timing• Structure• Frequency Storage• Encoding of Information (e.g., categorization)• Short vs. Long-term• Memory Evaluation• Retrieve Information• Combine information• Decision-making (judgment) 15 | P a g e
  16. 16. METHODS OF APPRAISALS 16 | P a g e
  17. 17. Su b je c tive Appraisal M th o ds (c an b e u se d e w ith an y type o f jo b ) Relative Methods 1) Ranking 1st _____ 2nd_____ 3rd _____ 2) Pair Comparison Employee-1 _____ versus Employee-2 _____ Employee-1 _____ versus Employee-3 _____ etc.• Both are difficult to use with a large number of subordinates Su b je c tive A raisal M th o ds pp e Absolute Methods1) Narrative essay• Unstructured (e.g., content, length)• Affected by the writing ability of supervisors and time availability2) Graphic Rating Scale (most common)_____ _____ _____ _____ _____ Very Average Excellent Poor 17 | P a g e
  18. 18. Su b je c tive Appraisal M th o ds eBehavioral Methods (use of critical incidents; examples of good and poor job behavior collected by job experts over time) Behavior Observation Scales (BOS) • Rate the frequency in which critical incidents are performed by employees • Sum the ratings for a total “performance” score 1) Assists others in job duties. _____ _____ _____ _____ _____ Never Usually Always 2) Cleans equipment after each use. _____ _____ _____ _____ _____ Never Usually Always Ob j e c tiv e A p r aisal Data p1) Production Data (e.g., sales volume, units produced) • When observation occurs (timing), and how data is collected • Fairness and relevancy issue • Potential limited variability • Limitations regarding supervisory personnel2) Personnel Data • Absenteeism (excused versus unexcused) • Tardiness • Accidents (fault issue) 18 | P a g e
  19. 19. Be h avio rally A c h o re d R g Sc ale n atin (BA S) P c e ss R ro1) Generate critical incidents (examples of good and poor job performance)2) Place Critical Incidents Into performance dimensions (e.g., Responsibility, Initiative, Safety)3) Retranslation Step (do step # 2 again with a separate group of job experts. Discard incidents where disagreement exists as to which dimension in which they belong)4) Calculate the mean and standard deviation of each critical incident (discard those with a large standard deviation)5) Place critical incidents on a vertical scale BA S (P s an d C o n s) R ro • Process involves various employees (increases the likelihood of usage) • Job specificity (different BARS need to be developed for each position) • Not any better at reducing common rating scale errors (e.g., leniency, halo) • Time consuming 19 | P a g e
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  21. 21. C o m m o n R g Sc ale E r r o r s atin1) Leniency (positive bias) X_____ _____ _____ _____ _____ Very Average Excellent Poor All lead to a2) Severity (negative bias) restriction in the range of X performance_____ _____ _____ _____ _____ Very Average Excellent scores Poor3)Central Tendency (midpoint) X_____ _____ _____ _____ _____ Very Average Excellent Poor H E rro r alo Responsibility Commitment Initiative Sensitivity Judgment CommunicationHigh ratings on other Observation of specific performance behavior (s) (e.g., dimensions volunteers to work overtime) 21 | P a g e
  22. 22. Example of rating scale and more general guidelinesEEE – Exceeds Expectations Exceptionally Consistently and significantly above what is expected from someone at this level of experience. Exceptionally good competence and performance level, which is usually very hard and unconventional to reach. Is rewarded by base salary and by maximum pay for performance. Good career development.……(more categories usually in between)MSE – Meets Some Expectations Whilst meeting requirements in some areas, requires further development in others. Performance meets expectations in some areas. Staying at this level leads to stopping of career and wage development.BE - Below Expectations Below what is expected from someone at this level of experience. Competence and performance level, which can not be accepted as such (can be accepted only temporarily). Staying at this level leads to counseling out process. 22 | P a g e
  23. 23. IMPORTANCE OF PERFORMANCE APPRAISALToday’s working climate demands a great deal of commitment and effortfrom employees, who in turn naturally expect a great deal more from theiremployers. Performance appraisal is designed to maximize effectiveness bybringing participation to more individual level in that it provides a forum forconsultation about standards of work, potential, aspirations and concerns.It is an opportunity for employees to have significantly greater influenceupon the quality of their working lives. In these times of emphasis on“quality”, there is a natural equation: better quality goods and services fromemployees who enjoy better quality “goods and services” from theiremployers.Performance appraisal must be seen as an intrinsic part of a manager’sresponsibility and not an unwelcome and time-consuming addition to them.It is about improving performance and ultimate effectiveness.Performance appraisal is a systematic means of ensuring that managersand their staff meet regularly to discuss post and present performanceissues and to agree what future is appropriate on both sides. 23 | P a g e
  24. 24. BENEFITS OF PERFORMANCE APPRAISALFor the appraisee Better understanding of his role in the organization—what is expected and what needs to be done to meet those expectations Clear understanding of his strengths and weaknesses to develop himself into a better performer in future Increased motivation, job satisfaction, and self-esteem Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfil those aspirations Improved working relationships with supervisorsFor the Management Identification of performers and non-performers and their development towards better performance Opportunity to prepare employees for assuming higher responsibilities Opportunity to improve communication between the employees and management Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plansFor the Organization Improved performance throughout the organization Creation of a culture of continuous improvement and success 24 | P a g e
  25. 25.  Conveying the message that people are valued UNDERSTANDING PERFORMANCE MANAGEMENT 25 | P a g e
  26. 26. IMPORTANCE OF A PERFORMANCE MANAGEMENT PLAN• Links employee performance to unit objectives• Communicates performance goals to employees for shared understanding• Recognizes and acknowledges good performance• Recognizes areas where performance must be improved 26 | P a g e
  28. 28. When: 1) Annual Performance Review PreplanningThe Performance The Performance 2) New hire or new position 3) Change in organizational priorities Management Management Cycle Cycle Performance and Development Plan Planning When: Ongoing; Merit Interim daily, weekly, Determination Coaching monthly as needed (if available) Annual Performance Appraisal Coaching Progress Appraisal Review When: Annually Employee Self Appraisal Interim Coaching Informal Feedback on Performance 28 | P a g e
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  30. 30. RESEARCH AND SURVEY:Statement of the Problem:Performance appraisal is a process of assessing, summarizing anddeveloping the work performance of an employee. In order to be effectiveand constructive, the performance manager should make every effort toobtain as much objective information about the employees performance aspossible. Low performance can push the organization back in today’s toughcompetition scenario. The project is aimed at analyzing the performanceappraisal in companies. 30 | P a g e
  31. 31. FINDINGS From the survey results its evident that both the appraisee’s and appraisers expectation from Performance appraisal system are the same i.e. “Determination of Promotion or Transfer” and “Salary Administration and Benefits”. Hence a single performance appraisal system can satisfy needs of both the Appraiser and appraisee. Therefore the Performance appraisal program would be designed in such a way that the appraiser would be able to analyse the contribution of the employee to the orgaisation periodically and all the employees who have been performing well would be rewarded suitably either by an increase in the salary or a promotion. Through this the appraiser can also motivate the employees who felt that they had no growth in the organisation and serves the purpose of employee development.Thus performance appraisals can be used as a significant tool fo career lanning. Analyzing ones own strengths and weaknesses is the best way of identifying the potentials available, rather than the other person telling. Self-appraisal is a tool to analyze oneself. One of the most important findings was that almost all the employees wanted self- rating to be a part of performance appraisal program carried out by the organisation. From the responses of the appraiser we can also see that Self rating is not encouraged by the organisations. This could therefore be an important factor which leads to dissatisfaction among the appraisees. At the end of the year of the appraisal period the appraisal process should begin with self- appraisal by every employee. To appraise ones own self on key performing targets and qualities, the appraisee would go through a process of reflection and review. It is an established fact that 31 | P a g e
  32. 32. change is faster when it is self initiated. If any employee has to improve or do better, he must first feel the need to do so. Reflection and review is a process that enables him to feel the need and improve more upon his strengths and weaknesses Another point to be noticed is that even in the other forms of Performance Appraisal also the employees expect that they should be given a chance to rate their own performance. This can allow the employee to analyze ones own performance which gives new insights on how one is performing and what are the critical points where he has to put his best and improve upon The existence of a proper complain channel was also of utmost importance to the appraisees. They should be given a chance to convey their greviences to the top management. The appraisees also expect that their comments and suggestions should be taken in to account while conducting the appraisals. This expectation is not fulfilled as the appraisers do not take their comments and suggestions into consideration. Therefore they should look into this matter before it leads to dissatisfaction among the employees. The results also indicate that the there is no communication of top management plans and business goal to the appraisee. The appraisers on the other hand feel that the goals and plans have been clearly communicated to the appraisees. Communication is very essential for any system to function efficiently. Therefore the appraisers should look into this matter and see to it that the goals and plans are communicated effectively. 32 | P a g e
  33. 33.  The findings suggest that for success of Appraisal system the credibility of appraiser is of utmost importance. As per the Appraiser, a poorly conducted appraisal system would lead to demotivation and ineffective teamwok which will result in inefficient functioning and low productivity in the organization. Therefore, if at all they feel there is dissatisfaction among the appraisee’s they should motivate them. Achievement, recogntion, invelvement, job satisfaction and development can motivate the employees to a large extent. Along with this satisfactory working conditions and appropraite awards also play an important role. Also a majority of employees were satisfied with the current appraisal system although they requested for some changes. Most of the employees were also not clear about the criteria on which ratings were given to each employee while conducting the performance appraisal. Instead of secrecy there should be openess. Because of lack of communication, employees may not know how they are rated. The standards by which employees think they are being judged are sometimes different from those their superiors actually use. Proper communication of these ratings can help the employers achieve the level of acceptability and commitment which is required from the employ. From the survey we can also derive that the appraisee’s expect a post appraisal interview to be conducted wherein they are given a proper feedback on their performance and they can also put forward their complaints if any. The appraisal should also be followed up with a session of counseling which is often neglected 33 | P a g e
  34. 34. in many organizations. Counseling involves helping an employee to identify his strengths and weaknesses to contribute to his growth and development. Purpose is to help an employee improve his performance level, maintain his morale, guide him to identify and develop his strong points, overcome his weak points, develop new capabilities to handle more responsibilities, identify his training needs. Current trends• Current trends in performance appraisal include greater employee ownership and involvement - Preparation of report on their performance / self-evaluation - Preparation of desired development focuses - Preparation of goals for next period• Forced distributions have spread – in particular in the US - They are fiercely debated 34 | P a g e
  35. 35. RECOMMENDATIONSKeep six honest serving-men(They taught me all I knew);Their names are What and Why and WhenAnd How and Where and Who 35 | P a g e
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  41. 41. Performance Appraisal ‘Higher-level’ strategies and objectivesSMARTGOALS• Specific Agreeing on Evaluation of• Measurable performance period’s performance• Agreed objectives & feedback• Realistic Key issues: Procedural and• Timed distributive justice, focus & Deciding effectiveness of incentives on training and Performance-based development compensation plans Career Planning & Counceling 41 | P a g e
  42. 42. Summary Prepare for the appraisal discussion Discuss employee’s dreams, goals Set mutual goals; put them in writing Give positive and corrective feedback Use up-to-date job descriptions Evaluate your performance Involve the employee in the discussion Be open, candid and specific Evaluate performance—not personality Sincerely care about your employees 42 | P a g e
  43. 43. CONCLUSIONWith rewards being directly linked to achievement of objectives, goalsetting and Performance Appraisal assumes utmost importance. ThePerformance Appraisal System has been professionally designed andit is monitored by HRD. The implementation is the responsibility ofeach and every employee along with their supervisor. There should beadequate training to the evaluator that will go a long way inanswering the quality of Performance Appraisal. In conclusion, aPerformance Appraisal is a very important tool used to influenceemployees. A formal Performance review is important as it gives anopportunity to get an overall view of job performance and staffdevelopment. It encourages systematic and regular joint-stocking andplanning for the future. Good performance reviews therefore don’tjust summarize the past they help determine future performance. 43 | P a g e
  44. 44. BIBLIOGRAPHYBOOKS Organizational Behavior by Steve Robbins The Art of HRD, Reward Management, Volume 9 by MichealArmstrong and Helen Murlis Performance Management, Concepts, Practices and Strategiesfor Organisation success by S. K. Bhatia 44 | P a g e
  45. 45. ANNEXURE 1SUMMARY OF APPRAISEE FEEDBACK Expectations from Appraisal System : Respondents were asked to rank the various options according to their preference. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was given on the basis of ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on. Particular Score Overall Rank Salary Administration and Benefits 87 1 Determination of promotion or 109 2 transfer Assistance in goal 228 3 Guideline for training plan 254 4 An insight into your strengths and 312 5 weakness Decision to layoff 354 6 From the above table it can be seen that employees expect “Salary Administration and Benefits” to be the main reason for conducting a 45 | P a g e
  46. 46. Performance Appraisal. “Decision to layoff” is of least importance as per the appraisee.Awareness about Responsibilities : From the graph it can be seen that majority of employees are aware about their responsibilities, which implies that the appraisers have efficiently communicated to the appraisees all the parameters that will be taken into account during appraisal. Satisfaction Level among appraise regarding Appraisal System : 46 | P a g e
  47. 47. From graph it can be seen that majority of the respondents are satisfied with the appraisal system. Only a meager 30% were dissatisfied with the Performance Appraisal programs.Awareness about performance ratings : This clearly shows that majority of the employees are not aware about the performance ratings that are taken into account while conducting a performance appraisal. Allowing Self ratings : 47 | P a g e
  48. 48. From graph it can be seen that majority of respondents want self rating to be a method of conducting the appraisals .Chance to rate your own performance : From the graph we can see that majority of the employees are not given a chance to rate their own performance in the organization.Timing of Appraisals : This shows that most of the organisations conduct their Performance Appraisal programs annually. A very small percentage of the organisations conduct Performance Appraisals on a half yearly basis. 48 | P a g e
  49. 49. The share of the quarterly and monthly appraisals are extremely minimal.Credibility of Appraiser : This shows that according to the employees/appraisees the credibility of the appraiser is extremely important and it has an effect on the overall Performance appraisal program.Complaint channel for employees : 49 | P a g e
  50. 50. This shows that there is no proper complaint channel existing in the organisations for the employees who are dissatisfied with the performance appraisal system.Standards communicated to employees : From this it can be seen that there is a clear majority among the employees who say that the standards on the basis of which the performance appraisal is carried out is not communicated to the employees before hand.Performance Appraisal : 50 | P a g e
  51. 51. Almost all the Performance Appraisals are carried our by the Immediate Supervisor in these organisations. In very few organisations, Rating committees carry out the performance appraisals. None of the organisations use Peer Appraisals, Appraisals by subordinates and Self rating as a method of Performance Appraisal.Clear understanding of Appraisee’s job : This shows that the performance Appraisal programs are successful in giving a clear understanding of the appraisee’s job to both appraiser and appraisee. 51 | P a g e
  52. 52. OBJECTIVES OF APPRAISAL SYSTEM : From the figure we can derive that the objective for conducting the Appraisal system is clear only to half of the employees. The remaining half are not clear about the objective for which the Performance Appraisal is carried out.Good communication between top management and business goals : This shows that the appraisal systems do not provide a good communication flow of the top-management plans and business goals to the staff below. 52 | P a g e
  53. 53. Comments and suggestions to be considered : Almost all the employees expect that their comments and suggestions should be taken into consideration while conducting the Performance Appraisal.Post Appraisal interview As per the response from the employees we can see that there is no interview conducted after the appraisal program for majority of the employees. 53 | P a g e
  54. 54. ANNEXURE 2SUMMARY OF APPRAISER FEEDBACK Purpose of Appraisal Respondents were asked to rank the various options according to their preference. (Rank 1 being most preferred and rank 6 being least preferred). Then scoring was done on basis of these ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on. Then the total score for each purpose was calculated and overall ranking was given. Particular Score Overall Rank Determination of promotion or 24 1 transfer Salary Administration and Benefits 27 2 Decision to layoff 42 3 Guideline for training plan 69 4 Assistance in goal 72 5 An insight into your strengths and 81 6 weakness 54 | P a g e
  55. 55. From table it can be seen that appraiser considers “Determination of promotion or transfer” & “Salary administration and Benefits” as two important factors for conducting an Appraisal.Appraisal System In this question appraiser was asked to rate how helpful the appraisal system is, from the graph it can be seen that majority of appraisers have rated 5,4 & 3 which implies that Performance Appraisal system is very helpful in Planning their work. Also most of the appraisers are satisfied with the appraisal system.Support from subordinate 55 | P a g e
  56. 56. This question was asked to find out how helpful appraisal system is in communicating the support that apprasier needs from appraisee. From results it is seen that the performance appraisal system is very helpful in communicating the support and help needed by the appraiser from the appraisee.Type of Appraisal System From results its clear that majority of companies prefer to use “360 degree feedback” system for Performance Appraisal. As 360 degree feedback gives feedback of appraisee from everyone interacting with him, it is more reliable and hence most preferred.Performance Appraisal criteria 56 | P a g e
  57. 57. From results we can see that Qualitative Process is considered as the most important criteria for which the Performance appraisal programs are carried out, which shows that companies consider Qualitiy of product & service and Customer satisfaction as most important factors.Timing of Appraisals From graphs we can see that most of companies conduct appraisals on annual basis. Some companies conduct quaterly also.Effect of poor Appraisal System 57 | P a g e
  58. 58. It can be seen from results that most of the employees get De- motivated because of a poorly conducted appraisal. To some extent employees dont coordinate with their team members. Thus resulting in reduction of output.Communication between top management and staff All appraisers totally agree that performance appraisal helps in communicating the top management plans and business goals to staff at lower level.Insight to Apprasiee’s strength and weakness 58 | P a g e
  59. 59. It is evident from the results that performance appraisal system doesn’t help the appraiser in understanding strength and weakness of apraisee.Appraisee’s comment and suggestion From the results it can be seen that appraisee’s comments and suggestion are not taken into consideration before Performance Appraisal. Performance Appraisal system is designed by appraiser without consulting appraisee.Performance Appraisal 59 | P a g e
  60. 60. It is evident from the results that performance appraisal is conducted by the Immediate Supervisor in all the companies.Understanding of Apprasiee’s Job From this it is clearly seen that according to appraiser there is a clear and joint understanding of the appraisee’s job.Standards for Performance Appraisal 60 | P a g e
  61. 61. From results it is evident that Performance appraisal standards are very well communicated to Appraisee before the Appraisal is carried out. Self rating in Performance Appraisal From results it can be clearly seen that the Appraisee is not given a chance to rate his own performance. Action after Performance AppraisalThis shows that most of the companies act upon the results of theirPerformance Appraisal program. 61 | P a g e
  62. 62. ANNEXURE 3 PERFORMANCE APPRAISAL KEY TERMSPerformance appraisal is a universal phenomenon in which the organizationis making judgment about one is working with and about oneself. It servesas a basic element of effective work performance. Performance appraisal isessential for the effective management and evaluation of staff. It aims toimprove the organizational performance as well as individual development.The history of performance appraisal is quite brief. Its roots in the early20th century can be traced to Taylors pioneering Time and Motion studies.As a distinct and formal management procedure used in the evaluation ofwork performance, appraisal really dates from the time of the Second WorldWar - not more than 60 years ago. Performance appraisals have beenincreasingly implemented by most modern organization as a tool foremployee assessment.Performance is an employees accomplishment of assigned work asspecified in the critical elements and as measured against standards of theemployees position. The term “Performance Appraisal” is concerned withthe process of valuing a person’s worth to an organization with a view toincreasing it.Traditional Appraisal system; Performance appraisal is developed asa simple method of income justification. Appraisal used to decide whetherthe salary of an individual was justified or not. The decrease or increase inpay depends upon employee’s performance.Modern Appraisal System: Performance appraisal is defined as astructured formal interaction between a subordinate and a supervisor thatusually takes the form of a periodic interview, in which the workperformance of the subordinate is examined and discussed with a view toidentify weakness, strength and opportunities for improvement and skillsdevelopment.Performance-Based Actions are the reduction in grade or removal of anemployee based solely on performance at the unacceptable level.Performance Plans are the documentation of performance expectationscommunicated to employees from supervisors. Plans define the criticalelements and the performance standards by which an employeesperformance will be evaluated.Performance Standards are statements of the expectations orrequirements established by management for a critical element at aparticular rating level. A performance standard may include, but is not 62 | P a g e
  63. 63. limited to, factors such as quality, quantity, timeliness, and manner ofperformancePerformance Award is a one-time cash payment to recognize thecontributions of an employee and is based on the rating of record. Aperformance award does not increase basic pay.Performance Improvement Plans (PIP) are developed for employeesat any point in the appraisal cycle when performance becomes Level 1(unacceptable) in one or more critical elements. This plan affords anemployee the opportunity to demonstrate acceptable performance and it isdeveloped with specific guidance provided by a servicing human resourcesoffice.Performance Management is the integrated process by which anagency involves its employees in improving organizational effectiveness inthe accomplishment of agency mission and strategic goals. PerformanceManagement consists of: performance planning, monitoring employeeperformance, employee development, evaluating employee performance, andrecognition.Performance appraisal system describes how agency will identifyperformance standards and core competencies and communicate them toemployees. Periodical appraisal helps the company to compare employee’sperformance and to take apt decisions for further improvement. Astructured business planning depends on the performance of the employeeand it will be successful only when the employees are analyzing their workperformance individually. The formal performance appraisal in a companyis conducted annually for all staff and each staff member is appraised bytheir line manager. Generally employees are appraised based on thestructure of the companyAnnual performance appraisals evaluate the role of the employee in theorganizational development and also monitoring the standard, expectations,objectives, efficiency in handling task and responsibilities in a period oftime. Appraisal also helps to analyze the individual training needs of theemployee and planning of future job allocation. It also help to adoptappropriate strategy based on organizational training needs. Performanceappraisal analyzes employee’s performance and which utilize to review thegrades and modify the annual pay. It generally reviews each individualperformance against the objectives and standard of the organization.Performance management creating a work environment and it is enablingthe employees to perform best of their abilities. Through performancemanagement companies are hiring efficient people .Then the companybuilding up their skills and talents through employee developmentprogrammes.The tools like performance appraisal, performance review, andappraisal forms create the process of nurturing employee developments. 63 | P a g e
  64. 64. Effective appraisal considering increase in staff productivity, knowledge andcontribution. Formal management procedure used the evaluation of workperformance. Effective appraisal helps the employer in providing increasedproductivity, knowledge and contribution from the staff. These resourcesincrease the ability to do performance consulting, measure performanceimprovement, and provide resultant training using internal staff, whichincreases self-sufficiency in performance consulting and improvement.Providing feed back about employee’s job performance and the contributionof reward for their work is very essential in the smooth functioning of anorganization.Performance appraisal tries to: 1. Give feedback to employees to improve subsequent performance. 2. Identify employee-training needs. 3. Document criteria used to allocate organizational rewards. 4. Form a basis for personnel decisions-salary (merit) increases, disciplinary actions, etc. 5. Provide the opportunity for organizational diagnosis and development.Facilitate communication between employee and administrator. 64 | P a g e
  65. 65. APPENDIX 1 QUESTIONS FOR APPRAISEEName: ___________________________ Contact No: __________________________ 1. What do you expect from a Performance appraisal : (Rank the options from 1 to 6; 1 being most preferred & 6 being least preferred) Detail Rank Salary Administration and Benefits Determination of promotion or transfer Decision on layoff Assistance in goal Guideline for training Plan An insight into your strengths and weakness 2. Do you know what exactly is expected from you at work? a. Yes b. No 3. Are you satisfied with the appraisal system? 1 2 3 4 5 (1 = Least satisfied; 5 = Most satisfied) 4. Are you aware of performance ratings? a. Yes b. No 5. Do you think you should be given an opportunity to rate your own performance? 65 | P a g e
  66. 66. a. Yes b. No6. Are you given a chance to rate your own performance? a. Yes b. No7. Timing of Appraisals a. Monthly b. Quarterly c. Half Yearly d. Annual e. Anytime8. Does the credibility of Appraiser affect the Performance Appraisal System? a. Yes b. No9. Is there a complaint channel for the employees who are dissatisfied with the performance appraisal system? a. Yes b. No10.Are the standards on the basis of which the performance appraisal is carried out communicated to the employees before hand? a. Yes b. No11.Who conducts the performance appraisal”? a. Immediate supervisor b. Peer appraisal c. Rating committees d. Self-rating 66 | P a g e
  67. 67. e. Appraisal by subordinates 12.Is the performance Appraisal successful in giving a clear understanding of the appraisee’s job to both appraiser and appraise? a. Yes b. No 13.Are the objectives of appraisal system clear to you? a. Yes b. No 14.Does the appraisal system provide a good communication between the top- management plans and business goals to staff below? a. Yes b. No 15.Do you want your comments and suggestions to be taken into consideration during appraisal? a. Yes b. No 16.Is there a post appraisal interview conducted? a. Yes b. No APPENDIX 2 QUESTIONS FOR APPRAISERName: ___________________________ Contact No: __________________________ 1. Purpose of Performance appraisal : (Rank the options from 1 to 6; 1 being main purpose & 6 being last purpose) Detail Rank Salary Administration and Benefits Retain performing employees Determination of promotion or transfer 67 | P a g e
  68. 68. Decision on layoff Assistance in goal Guideline for training Plan2. Is the Performance Appraisal helping you to plan your work well? 1 2 3 4 5 (1 = Least helpful; 5 = Most helpful)3. Does the system provide you a chance to communicate the support you need from your subordinate to perform the job well. a. Yes b. No4. Which appraisal system is being employed in the company? a. Assessment centre b. MBO c. BARS d. 360 degree feedback e. Balance scorecard5. Performance Appraisal criteria a. Quantitative outcome criteria (Sales volume, Sales price, Productivity, Goal accomplishment rate) b. Qualitative process criteria (Quality of product or service, Customer satisfaction) c. Quantitative process criteria (Efficiency, Cost/expenses, Attendance) d. Qualitative process criteria (Judgment, Work attitude, Leadership, Conduct /Trait)6. Timing of Appraisals a. Monthly b. Quarterly 68 | P a g e
  69. 69. c. Half Yearly d. Annual e. Anytime7. What do you think is the effect of a poor appraisal system a. De-motivation b. Retention c. Ineffective teamwork8. Does the appraisal system provide a good communication between the top- management plans and business goals to staff below? a. Yes b. No9. Does it give insight to appraisee regarding his strength or weakness? a. Yes b. No10. Are employee’s comments and suggestions taken into consideration before the appraisal? a. Yes b. No11.Who conducts the performance appraisal” a. Immediate supervisor b. Peer appraisal c. Rating committees d. Self-rating e. Appraisal by subordinates12.Is the performance Appraisal successful in giving a clear understanding of the appraisee’s job to both appraiser and appraise? b. Yes b. No13.Are the standards on the basis of which the performance appraisal is carried out communicated to the employees before hand? a. Yes b. No 69 | P a g e
  70. 70. 14.Do you give an opportunity to the appraisee to rate his own performance? a. Yes b. No15.Do you act upon the results of your performance appraisal? a. Yes b. No 70 | P a g e
  71. 71. 16.If yes, then mention the remedial measures taken? 71 | P a g e