Abhijeet Chanchlani Bhavana Sharma Gaurav Savlani Soni Acharya Shankar

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PERFORMANCE APPRAISAL

WHAT IS PERFORMANCE APPRAISAL?

PERFORMANCE APPRAISAL is a process of evaluating an employees performance of a job in terms of its requirements.

Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes AAAA the form of a periodic interview,annual or in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.

HISTORY OF PERFORMANCE APPRAISAL

Employee appraisal systems are said to have been used for the first time during the 1st World War.

The US Army adopted the Man To- Man rating system for evaluating military personnel

During the 1920-30 period, rational wage structures for hourly paid workers were adopted in industrial units. Under this system, the policy of giving grade wage increment on the basis of merit was accepted. These employee programs were known as Merit rating programs.

OBJECTIVE OF PA
1. To enable an organisation to maintain an inventory of the number and quality of all managers and to identify and meet their training aspirations 2. To determine increments ,rewards,ad provide a reliableindex for grater responsibility 3. To maintain individual and group deveopment by informing the employee of his performance standards 4. To suggest employee ways of improvement during review period 5. To identify T&D need and its effectiveness

6. To plan career development ,HR planning based on

AIMS OF PA
Performance Appraisal is being practiced in 90% of the organizations worldwide

Typically, Performance Appraisal is aimed at:

To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. To diagnose the training and development needs of the future. . To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development . To reduce the grievances of the employees.

IMPORTANCE OF PA
PA is an important tool of personal managementIt is a judgement of the charactritics,traits and performance of employees and has a wide range of utility.\

I.

It unifies the appraisal procedure so that all employees are rated in the same manner so that ratings are comparable

II. These are information in the form of records which can be produced as evidence III. It serves stimulate and guide employee development IV. It makes a better employee-employer relation through mutual confidence V. It gives the supervisor a more effective tool for rating their personnel.

WHAT SHOULD BE RATED

There are SEVEN criteria 1. QUALITY 2. QUANTITY

3. TIMELINESS
4. COST EFFECTIVENESS 5. NEED FOR SUPERVISION 6. INTERPERSONAL IMPACT 7. TRAINING

THE EVALUATION PROCESS

Establish performance standards

Communicate performance expectation to employees

Measure actual performance

Compare actual P with standards

Discuss with employee

Initiate corrective action

METHOD OF PERFORMANCE APPRAISAL

There are two types. Traditional & Modern

Traditional :Straight ranking method Man-to-Man comparison Paired comparison Grading

Graphic rating
Checklist Free essay

Modern Method :Assessment Centre MBO 360 Degree Appraisal Human asset accounting Method

Behaviourally anchored rating method

1.MBO Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management . The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Features and Advantages

Some of the important features and advantages of MBO are: Motivation Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better communication and Coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period. Clarity of goals

Limitations 1. It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes. 2. It underemphasizes the importance of the environment or context in which the goals are set in .In1991 comprehensive review of thirty years of research on the impact of Management by Objectives, Robert Rodgers and John Hunter concluded that companies whose CEOs demonstrated high commitment to MBO showed, on average, a 56% gain in productivity. Companies with CEOs who showed low commitment only saw a 6% gain in productivity. 3.It did not address the importance of successfully responding to obstacles and constraints as essential to reaching a goal. The model didnt adequately cope with the obstacles of: Defects in resources, planning and methodology, The increasing burden of managing the information organization challenge, The impact of a rapidly changing environment, which could alter the landscape enough to make yesterdays goals and action plans irrelevant to the present. 4.Tug of war

2.3600 Feedback:
360-degree feedback, also known as multi-rater feedback, multisource feedback, or multisource assessment Performance-appraisal data collected from 'all around' an employeehis or her peers, subordinates, supervisors, and sometimes, from internal and external customers. Its main objective usually is to assess training and development needs and to provide competence-related information for succession planningnot promotion or pay increase. The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360degree review."

LIMITATION
However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well

3.BEHAVIOURALLY ANCHORED RATING SCALE BARS Behaviorally Anchored Rating scales is a method that combines elements of the traditional rating scales and critical incidents methods. In order to construct BARS seven steps are followed as mentioned below Examples of effective and ineffective behavior related to job are collected from people with knowledge of job. These behaviors are converted in to performance dimensions. A group of participants will be asked to reclassify the incidents. At this stage the incidents for which there is not 75% agreement are discarded as being too subjective. Then the above mentioned incidents are rated from one to nine on a scale. Finally about six to seven incidents for each performance dimensions- will be used as BARS. This is by far the best method used for a performance appraisal method

ADVANTAGES & LIMITATION

Advantages:More accurate Clear standards Good for providing feedback BARS technique is more time-consuming and expensive than other appraisal tools.

4.HUMAN ASSET ACCOUNTING METOD The HAAM refers to activity devoted to attaching money estimates to the value of a firms internal human organization and its external customer goodwill. The current value of a firms human organization can be appraised by periodic measurements of Key causal & Intervening enterprise Key causal variables Organization's management policies Business leadership Strategies Skills and behaviors Decisions

Intervening enterprise variables Loyalties Attitudes Motivations Communication Decision making

5.STRAIGHT RANKING METHOD This is the most commonly used category rating method. The appraiser checks the appropriate place on the scale for each task listed.it is giving a rank to a person on his job performance against that of another member of a competitive group by placing him as number one or two or three in total group.its a merit based rating. 6.PAIRED COMPARISON METHOD Each employees every trait is compared with all others in pairs one at a time using the same scale for performance. The numbers of times each individual is compared with another is recorded in a paper .Thes numbers yield the rank order of the entirs group.It makes judgement easier than ordinary ranking method. It is not suitable when group is large.

7.GRADING METHOD The rater considers certain features such as analytical ability,self;expression,job knowledge, leadership etc. and marks them accordingly to a scale. The actual performance is then compared with these grades and he is allocated the grade which best describes his performance. .

8.GRAPHIC OR LINEAR RATING The factors included in this rating system are Employee Characteristics & Employee Contribution. Employee Characteristics are:Initiative Leadership Dependability Attitude Enthusiasm Loyalty Creative ability Emotional ability Decisiveness Employee Contribution:Quantity and quality of work The responsibility assumed Specific goals achieved Regularity of attendance Versatility etc. These traits are evaluated to a continuous scale.

9.FORCED CHOICE DISTRIBUTION METHOD It was evolved after a great deal of research conducted for the military services during World War II It attempts to correct a raters tendency to give consistently high or low ratings to all the employees. Eg-The employee is a) Is puncual and careful b) Is a hard worker and co-operative c) Is dishonest and disloyal d) Is disinterested in work. The rater is asked to indicate which of the four phrases are most and least descriptive of the employee.

10.CHECKLIST METHOD

Under this a rater does not evaluate employee performance ,he supplies reports about is and the final rating is done by the personal department. A series of questions are presented concerning an employee and checks to indicate if the answer to a question about an employee is positive or negative.

Eg:1. Is the employee really interested in his job ? yes/no

1. Does he show uniform behaviour to all ?

yes/no

It is difficult to assemble ,analyse, and weigh a number of statements about employee characterstics and contribution.

11.FREE ESSAY METHOD Under this method ,the supervisor makes a free form,openended appraisal of the employee in his own words and puts down his impression about the employee. No attempt is made to evaluate the employee in quantitative manner

DRAWBACKS
Its a subjective evaluation No common criteria for evaluation Supervisor is required to devote considerable time and thought

12.GROUP APPRAISAL METHOD

Under this method,employees are rated by a group.it consists their supervisor and three or four other supervisors who have some knowledge of their performance. Group discusses the standards and rate accordingly Very simple Devoid of bias

Time consuming

PROBLEMS OF APPRAISAL
1. Hallo effect 2. Leniency or strictness or constant error 3. The central tendency problem 4. Similarity error 5. Social differentiation

Wipro
Wipro started as a edible oil producer in 1947 from an old mill founded by Azim Premji's father under the name Western India Vegetable Product Chairman- Azim H Premji

In 1977 it entered the IT segment.

Third largest IT services company in India Wipro is the first People Capability Maturity Model (PCMM) Level 5 Company & also first Indian company to adopt Six Sigma 3rd Best HR Management company in India Employees- 97250 as on November 2008

HR POLICIES at Wipro
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) Manpower Planning Internal & External Recruitment Intensive Training & Development Performance Appraisal Promotion, Transfer, & Demotion Job Rotation Administration Section Grievance Handling Kaizen suggestion Welfare Activities Wipro Employee Stock Option Plan (WESOP) allows employees to share in the companies success.

Aims of a performance appraisal at Wipro.

Give feedback on performance to employees. Identify employee training needs. Document criteria used to allocate organizational rewards. Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and administrator. Validate selection techniques and human resource policies to meet federal Equal Employment

Opportunity requirements.

Important factors in 360 degree feedbacks

According to Mr. Pratik Kumar. The mission and the objective of the feedback must be clear. Employees must be involved early. Resources must be dedicated to the process, including top management's time.

Confidentiality must be assured.

The organization, especially top management, must be committed to the program.

Pratik Kumar Corporate VP HR, Wipro Technologies Limited One of the pioneers of 360 degree PA in India.

MARUTI UDYOG The company has introduced a unique 360-degree feedback system, starting with its senior leadership from the year 2007.

It is for the top management such as chief general managers and general managers, whose performance is assessed based on feedback from their peers and junior management employees within the same department.

Till the year 2006, their performance was being appraised only by the Directors.

PERFORMANCE APPRAISAL ANALYSIS OF BPO INDUSTRY

In most of the BPO industry the PA method which is being used is MBO