The new performance appraisal system implemented at Rezox Corporation has three key stages that occur throughout the year, rather than one annual review. The first stage involves setting goals and objectives at the start of the year. The second is a mandatory mid-year feedback session to discuss progress. The third is a year-end performance review to assess meeting targets, followed by separate merit increase discussions. A survey after implementation found the new system was a vast improvement over the previous numerical rating and forced distribution system, which left many employees discouraged.

1. Roll No.aaeesnn
205
80
May 2019
M. B. A. (Personnel Administration) Examination
IInd Semester
HUMAN RESOURCE MANAGEMENT
Time 3 Hours] [Max. Marks 60
No.e: Attempt any three questions from Section A. Each question carries 12 marks. Section B is
compulsory and carries 24 marks.
Section A
. Define HRM and explain various functions of HRM.
2. Explain meaning and bases of Promotion and Demotion.
What does it mean by Job Evaluation ? Explain various methods of Job Evaluation.
3.
What do you mean by Potential Appraisal ? Also explain the concept and process of Career
4.
and Succession Planning.
Write short notes on any two ofthe following:
(a) MBO.
5.
(b) Types of Virtual Organisation.
(c) Assessment Centre.
Section B
Read the following case and answerthe questions given at the end:
6.
NEW PERFORMANCE APPRAISAL SYSTEM AT REZOX CORPORATION
Re2ox Corporation was facing a problem with its performance appraisal system. Rather
than motivatingthe employees, the system was leaving them discouraged and disgnuntled.
The main features of the system were
i) The appraisal occurred once a year.
(ii) It required employees to submit their accomplishments in writing to their
managers.
(iii) The manager would assess these accomplishments in writing anl assiga nuinerical
ratings.
(iv) The appraisal included a sunmmary written appraisa! and a raing fron 1
(unsatisfactory) to 5 (outstanding).
() The ratings were on a forced distribution, controlled at the 3 level or below.
(vi) Merit increases were tied to the summary rating level.
(vii) Merit increase information and performance appraisals.occurred m oe sessaa
This system resulted in inequirable ratings and was cited by eunployees as a majar
source of dissatisfaction. It was reported that 95 percent of the employees received either à
3 or 4 on their appraisal. Merit raises for people varied by I to 2 percenm. Esseu(aily
across-tlie-bard raises were being given io all emptoyees, tegardless of performaoce the
over achuevers were feeling very dislheartened by this systen anul the anaPcucni reazeu
thal this system can lead to medicrity in the organization. Rather tan aueptng u fit the
old appraisal systeni, Rezox ton:ed a task force to ereate a new system lrvm seiacn.
l0c
task lorce iself was made up of senir luman resources evecuives, however, members of
P. T. O.

2. 2 205
the task force also cosulted with uni and infornmal groups of employees and a team of
iiddle managers. Together they created a niew system, which diffcred frem the old one in
many key respects:
(i) The absence of a numerical rating systein.
(ii) The presence of a half-year feedback session.
(ii) The provision for development planning.
iv) Prohibition in the appraisal guidelines of the use of subjective assessnenls o
performance.
The new system has three stages, as opposed to the one-step process of the old system.
These stages are spread out over the course of the year. The first stage occurs at the
beginning of the year when the manager meets with each employee. Together, they work
out a written agreement ou the employee's goals, objectives, plans, and tasks for the year.
Standards of satisfactory performance are explicitly spelled out in measurable, attainable,
and specific terms.
The second stage is a mid-year, mandatory feedback and discussion scssion between the
manager and the employee. Progress toward objectives and performance strengths and
weaknesses are discussed, as well as possible means. for improving performance in the latter
half of the year. Both the nianager and the. employee sign an "objectivas shet" iaticating
that the meeting took place.
The third stage in the appraisal process is the formal performance review, which takes
place at year's end. Both the manager and the.employee prepare a written document, stating
how well the employee metthe preset performance targets. They then meet and discuss the
performance of the employee, resolving any discrepancies between the perceptions of the
manager and the employee. This meeting emphasises feedback and improvement. Efforts
are made to stress the positive aspects of the employee's performance as well as the
negative aspects. This stage also inchudes a developmental planning session in which
raining, education, or development experiences that can help the employee are discussed.
The merit increase discussion takes place in a separate meeting from the performance
appraisal, usually a month or two later. The discussion usua!ly centers on the specific
reasons for the merit raise amount, such as performance, relationship with peers, and
position in salary range. This allows the employee to better see the reasons behind the
salary increase amount, as opposed to the summary rank, which tells the employee very
little. A follow-up survey was conducted the year after the implementation of the new
appraisal system. The results of the survey clearly showed that the new system is a vast
improvement over the previous one. Despite the fact that some of the philosophies, such as
the use of self-appraisals, are not compatible with the conventional management practices,
the results speaks for themselves.
Questions
1. What type of
performance appraisal is central to new system at Rezox? Which, if
any, of the criteria for a successful appraisal does his new system have?
2. How do you think, management feels ahout the new
performance appraisal systenn?
Why?
3. Are there any potential negative aspects of the new
performance appraisal system?