NAME: ROLL NUMBER: LEARNING CENTER: SEMESTER: SUBJECT NAME: MODULE NO.

: DATE OF SUBMISSION

NEELAM ASWAL 521131210 02882 4

th

Performance Management and Appraisal SET-1

AT THE LEARNING CENTRE: 10 Dec 2012

th

FACULTY SIGNATURE:

Master of Business Administration- MBA Semester 4

MU0016 Performance Management and Appraisal
(Book ID: B1337)

Assignment Set- 1

Q1. State the components of a performance management system.

Ans. Performance management is a continuous process in this unit we will discuss the cycle of performance management. A system is basically a set of interacting components. The components or parts of effective performance management system are: Performance planning: This is the process of identifying employee objectives and setting job expectations and goals for each position in the company. Each department in the company usually has different expectations for its employees based on the requirements of the positions in the department. Clearly defined expectations and goals give employees the greatest opportunity for advancing in the company. During this process managers also discuss the review and feedback process of the performance management system. Ongoing performance communication: A company is benefited by the performance management system only when there is a timely employee review and feedback system implemented in the program. Timely employee reviews and feedback sessions are dependent on the company's business operations and human resource guidelines. These review sessions will inform employees how well they are performing in their positions and what areas need to be corrected or improved. Most companies have an annual review process, although six-month reviews are often used. Performance appraisal meetings: The supervisor and the employee meet to discuss the employees performance during the appraisal period and to discuss potential goals for the upcoming appraisal period. Performance rewards: This is an important part of the performance management system. The thought of earning rewards for their actions, whether financial rewards or another form of benefit motivates employees. Usually an employee's performance review is linked with the financial bonus or pay raise, which ensures that the company gets the best performance out of each employee. Other nonfinancial rewards such as extra time off, special company-paid vacations, gift certificates, gifts for years of service or recognition banquets may also be offered.

Performance diagnosis and coaching: Employees who do not meet the criteria standards to be eligible for performance rewards may need additional training or coaching by their superiors to improve their job skills. Performance reviews is the starting point for the additional training; subsequent performance reviews may be scheduled to check if the employee has improved from the time of the initial review. Performance management systems are ineffective if they only reward employees for good performance. The system also needs to include training or coaching processes to ensure that all company employees are able to improve their performance.

Q2. What are the major errors that may occur during performance evaluation?
Ans. Following are disadvantages of performance appraisal: Spending more time on performance appraisal than performance planning or ongoing performance communication. Performance appraisal is the end of a process that goes on all the time - a process that is based on good communication between manager and employee. So, more time should be spent preventing performance problems than evaluating at the end of the year. When managers do good things during the year, the appraisal is easy to do and comfortable, because there wont be any surprises. Comparing employees with each other. Comparing employees creates hard feelings, damages morale and makes employees to compete so badly that they will not work as a team. And also, the manager can become a great target for hostility too. Forgetting appraisal is about improvement, not blaming. Performance appraisal aims to improve performance, not to find faults in employees or blame them. Managers who forget this end up developing employees who do not trust them, or even cannot stand them. That is because the blaming process is pointless, and doesnt help anyone. If there is a point to performance appraisal it must be getting the manager and the employees working together to have everyone get better.

Thinking a rating form is an objective, impartial tool. Many organisations use rating forms to evaluate employees. They do that because it is faster than doing it right. However, ratings are subjective and rating forms do not indicate the actual performance of the employee. Stopping performance appraisal when a persons salary is no longer tied to appraisals. Managers conduct appraisals so long to justify or withhold a pay increase. When employees reach their salary ceiling, or pay is not connected to appraisal and performance, managers do not bother. Performance appraisal is for improving performance, not just about pay. Believing they are in position to accurately evaluate employees. Managers deceive themselves into believing they can evaluate employee performance, even if they hardly ever see their staff actually doing their jobs, or the results of their jobs. Most managers are not in a position to monitor the employee consistently enough to be able to assess well. That is why appraisal is a partnership between employee and manager. Cancelling or postponing appraisal meetings. Often managers postpone meetings at the last moment. But it says to employees that the process is unimportant or phony. If managers arent willing to commit to the process, then they shouldnt do it. Employees are too smart not to notice the low priority placed on appraisals. Measuring or appraising the trivial. The easiest things to measure or appraise are the least important things with respect to doing a job. Managers are fast to define customer service as answering the phone within three rings, or some such thing. That is easy to measure if you want to. What is not easy to measure is the total quality of service that will get and retain customers. Measuring overall customer service is hard; so many managers do not do it. But they will measure the trivial. Thinking all employees and all jobs should be appraised in exactly the same way using the same procedures. All employees do not need the same things to improve their performance. Some need specific feedback, some do not. Some need more communication than others; performance evaluation using the same approach cannot he done in all jobs. Pitfalls owing to human resource department Following are the pitfalls of human resource department: Focusing on and stressing on paperwork and forms. Human resource departments emphasis on the forms and paperwork overshadows the real purpose of doing appraisals, and then huge amounts of resources are wasted. When HR departments concentrate on getting the forms done, thats exactly what they get - Forms done. Believing that ratings based form of appraisal will serve as protection against challenges by employees. Performance appraisal form is not going to withstand legal scrutiny, because it is too subjective and too vague.

Under training managers in the process. All that a performance appraisal technique needs is thorough training of the appraisers (managers) by the HR department. But, the HR department is usually content with designing some new forms, printing nut some basic instructions, and distributing them to managers. The assumption is managers will know the purpose, which goes often wrong. Not training employees. Both manager and employee should have the same understanding about why they are doing the appraisal, how it will be done and what is expected. This is because the only way it works is when employee and manager work together, in partnership. Thinking pressurising managers to get the forms is productive. One reason managers postpone with respect to doing appraisals is that they do not see the point, or see it as a waste of time. There are other reasons, too. Most can be handled by using approaches that take into account the needs of managers. Unfortunately, a goad many HR departments believe it is just a question of ordering, yelling, coercing or begging managers to get them done. That does not answer the reasons why managers arent doing them. If they feel they were useful, they would do them. The key to getting them done is to make them useful. Playing the appraisal cop. Unfortunately, HR departments get stuck with the responsibility of getting appraisals done by managers. Perhaps it is not their fault, but it is a strong indicator that the system being used has failed because in an accurately functioning system, each manager is assessed on a number of things, one of which will be their fulfilment of the performance management and .appraisal function. The responsibility lies with the management. If a manager is not accomplishing the responsibility, it is his or her boss that should be evaluating the manager. It is a cascading process. No appraisal system will work until each managers boss makes it clear that getting it done is going to be a factor in the managers own appraisal.

Q3. Explain the traditional methods of performance

appraisal in detail.

Ans.
From the name itself, one can identify that these are the methods that are most commonly used. The traditional methods of performance appraisal are: o Essay appraisal method The essay method includes an evaluated report created by the appraiser, which basically includes appraising an employee's performance based on facts and evidences. Besides using the information for decisions on pay rise, promotion or termination of employees, it can also be used for developmental purposes. Since essay appraisals are unstructured and undefined to a great extent, lack of consistency is a major problem. The indefinite, unstructured nature of the essay appraisal makes it highly susceptible to evaluator bias. By not emphasizing on all job-related behaviors or results, an evaluator may simply stress on those that reflect conditionally or unconditionally on an employee. This does not generally represent a clear picture of the employee or the job, which brings down the reliability of the method. o Straight ranking method Ranking methods compare employees with each other, resulting in an ordering of employees in relation to one another. Rather than in specific judgments about a number of job components, ranking regularly results in general evaluation of employees. Straight ranking demands an evaluator to order a group of employees from best to worst overall, or from best effective to worst effective in terms of a certain condition. The ranking process is carried out in a specific manner (for example, by selecting the best employee in a group first, then the rest, in descending order.) o Paired comparison method A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. This paired comparison methodology systemizes ranking and enables better comparison among individuals to be rated. Each member of the group is compared with all others in the group one at a time. Once the data based on the overall comparisons for each employee is prepared, the employees are given the final rankings.

o Critical incidents method This method describes how the employee behaved during the critical incidents with respect to performance over a period of time. These are then matched with the employee focusing on actual behavior rather than on qualities. Though this method suits well in performance review interviews, it has a drawback in that the evaluator has to make a note of the critical incidents as and when they occur. That may be an unrealistic task, and may hold-up the feedback to employees. Moreover, it makes little sense to wait for months or a year to solve a misdeed, a fault or get recognized for a good display of idea. o Field review checklist method Since every individual differs in quality and attitude, they unintentionally introduce bias in their ratings. To overcome this, essay and graphic rating measures can be combined in an organised review process. In the field review method, 'a representative of the HRM staff meets a chunk of evaluators from the supervisory units to discuss each rating, analytically notifying areas of inter-evaluator disagreement. It can be a technique to help every evaluator to observe the standards evenly and thus match the other evaluators. Although this method is very time consuming, it is very much reliable. o Graphic ratings scale method One of the most common methods of performance appraisal, the graphic ratings scale method requires an evaluator to measure on a scale, the angle to which an employee reflects a particular trait, behavior, or performance result. Evaluating forms comprise a number of scales, each relating to a certain job or performancerelated measurement, such as job skills, responsibility or quality of work. Each scale is a band of definite points, or anchors, which range from high to low, from good to poor, from most to least effective, and so forth. Scales mainly have five to seven points, although they can have more or less. Graphic rating scales may or may not describe their scale points. o Forced distribution method Forced distribution is a structure of comparative evaluation in which an evaluator rates subordinates according to specified directions. In contrast to ranking methods, forced distribution is frequently applied to several, rather than only one component of job performance. Forced distribution is primarily used to remove rating errors such as compassion and centralisation, but the process itself can cause rating errors because it forces subtle differences between employees even where job performance is quite similar. For example, even if every employee in a unit is doing a good job, the forced distribution method suggests some of them to be placed at the bottom of a graded range. For this reason, this method is not accepted, particularly in small

groups or where all the group members are equally talented.

Q4.Explain Carrier Planning in detail.

Ans.
What is career planning according to you? Well, career planning is a constant progression, which includes selecting a profession, getting a job, emerging in your job, probably changing careers, and ultimately retiring. Career planning can divided into the following steps with reference to performance management within an organisation. Performance evaluation: An employees performance and capability shall be evaluated all through and at the end of the probationary phase and annually thereafter. These evaluations will be used to improve employee efficiency, measure training requirements and plan training activities. In addition, it also helps in providing a basis for decisions on promotions, separations, placements, salary advancements, and other personnel actions. Probationary Phase: The probationary phase is a primary part of the selection process. It allows the appointing authority to coach an employee and evaluate the employee's evolution, effort and adaptability. Generally, the probationary phase is six months in most of the organisation. However, it is extendable by the project or process head for a period not to go beyond six months for good cause. The employee may appeal directly to the career service council with reference to any undue extension of the period designated to prevent merit principles. o Evaluating Probationary Employees: The appointing authority shall submit in writing for evaluation and approval for action at least one month earlier to the employee's eligibility to graduation from probation. The affected employee shall be notified of the action planned to be taken. o Promotion: When it is in the best interest of the organisation to fill vacant positions from the internal current employees, the evaluation of eligibility may be limited to a specific project or department. Promotions shall be

based on demonstrated capability, as well as excellence and duration of service. All promotions must be certified by the project or department head, director of personnel management, and the organisation commission. o Training: Some of the employees may receive training to ensure high quality performance. Each elected superior and training head must develop and execute a program to improve the job and career related skills of employees so that they may deliver more valuable service to the organisation.

Q5. Explain the plan-Do-Review-revise cycle of performance management.

Ans. The Plan-Do-Review-Revise cycle takes place over different time scales and at many levels. Examples for many levels and different time scales would be a community, corporate, service, team, individual, and so on. Review Revise Do Plan

The stages of Plan-Do-Review-Revise cycle depend on whether you are in an organisation and over what time-scale you are looking at. Following are the stages in the cycle: Plan: This stage: o Understands the current performance. o Prioritises the work needs to be done. o Identifies actions that need to be taken. o Plans for improvement.

Do: This stage: o Ensures that the proper systems and processes are in place to support improvement. o Takes action and manages risk. o Helps people to achieve better performance. Review: This stage: o Understands the impact of your actions. o Reviews performance. o Speaks to users and stakeholders about their experience. o Gets a better picture of varying circumstances. Revise: This stage: o Uses the lessons learned from review. o Changes the future plans. o Ensures that the future action is more appropriate, effective, and efficient.

q6. mr. samuel Dcosta is the HR executive at Evergreen Solutions Pvt. Ltd. He found that the performance of the marketing team has been decreasing over the past four months. Suggest measures that he can take up to improve the team performance of the marketing team.

Ans. The main aim of performance management is to improve performance. This becomes the responsibility of the manager as a coach and support employees in their activities to develop their knowledge and skills. The need for coaching may arise from formal or informal performance reviews, but opportunities for coaching will emerge during the normal day-to-day activities. Every time a manager assigns a new task to an employee, a coaching opportunity is created to help the individual learn any new skills or techniques that are needed to get the job done. Every time a manager provides an individual with feedback after a task has been completed, there is an opportunity to help that individual do better next time. Coaching as part of the normal process of management consists of: Making employees aware of their performance. Making sure that employees are not only aware of what is expected from them, but also understand what they need to know to be able to complete the task adequately. This gives

managers an opportunity to provide guidance at the outset, as guidance at a later stage may be seen as interference. Using appropriate situations to promote learning Encouraging people to take up higher-level issues and helping them identify how they would tackle them.