Project Final

[PERFORMANCE APPRAISAL]
(MADURAI KAMRAJ UNNIVERSITY)
PREPARED BY
: AARTI CHAUBEY
SUBMITTED TO
: MADURAI KAMRAJ UNIVERSITY
SPECIALISATION
: M.B.A. IN HUMAN RESOURCE MANAGEMENT
UNDER THE GUIDENCE : PROFESSOR MR. KAMLESH MISHRA
TOPIC
: PERFORMANCE APPRAISAL
ACADEMIC YEAR
: 2011-2012
DECLARATION
hereby
declare
that
the
project
work
entitled
[PERFORMANCE
APPRAISAL]submitted to the [MADURAI KAMRAJ UNIVERSITY], specialization in M.B.A IN HUMAN RESOURCE MANAGEMENT is a record of an original work done by me under the guidance of [PROFESSOR KAMLESH MISHRA].
[AARTI CHAUBEY]
[A8C7511308]
SR. NO.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
TOPIC
PERFORMANCE APPRAISAL METHODS OF PERFORMANCE APPRAISAL 3600 FEEDBACK SIGNIFICANCE OF PERFORMANCE APPRAISAL OBJECTIVE OF PERFORMANCE APPRAISAL ROLE OF PERFORMANCE MANAGEMENT FUNCTIONS OF EMPLOYEE PERFORMANCE ASSESSMENT CENTRES SUCCESSION PLANING PERFORMANCE APPRAISAL SYSTEMS PERFORMANCE EVALUTION SYSTEMS PERFORMANCE MANAGEMENT OUTSOURCING BALANCED SCORECARD BASICS HALF YEARLY PERFORMANCE SYSTEM APPRAISAL AS EMPLOYEE MOTIVATION APPRAISAL AS CAREER DEVELOPMENT
PAGE NO.
7 20 32 34 35 36 40 43 45 47 49 53 54 59 61 63
17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
LINKING COMPENSATION TO PERFORMANCE APPRAISAL PERFORMANCE APPRAISAL TRAINING PROCESS OF PERFORMANCE APPRAISAL TRAINING EMPLOYEE PERFORMANCE MANAGEMENT ELEMENTS IN APPRAISAL PROCESS DEVELOPING A GOOD APPRAISAL SYSTEMS BENEFIT OF APPRAISAL SETTING UP A PERFORMANCE MANAGEMENT SYSTEMS EVALUTOR TRAINING RECEVING FEEDBACK FORM SUBORDINATES ADVANCEMENT & EMPLOYEE PERFORMANCE POOR EMPLOYEE PERFORMANCE CAUSES FOR POOR EMPLOYEE PERFORMANCE ANNUAL EMPLOYEE REVIEWS BAD PERFORMANCE REVIEW PARAMETER TO APPRAISAL
64 66 67 81 85 87 90 91 93 94 96 98 101 103 105 107
33 34 35 36 37
PERFORMANCE REVIEW ORGANISATION STURCTURE & PERFORMANCE PERFORMANCE APPRAISAL FORM APPRAISAL & ORGANISATION PERFORMANCE PERFORMANCE APPRAISAL SOFTWARES
108 110 112 113 115
1. PERFORMANCE APPRAISAL
Performance appraisal is a universal phenomenon in which the organization is making judgment about one is working with and about oneself. It serves as a basic element of effective work performance. Performance appraisal is essential for the effective management and evaluation of staff. It aims to improve the organizational performance as well as individual development. The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War not more than 60 years ago. Performance appraisals have been increasingly implemented by most modern organization as a tool for employee assessment. Annual performance appraisals evaluate the role of the employee in the organizational development and also monitoring the standard, expectations, objectives, efficiency in handling task and responsibilities in a period of time. Appraisal also helps to analyze the individual training needs of the employee and planning of future job allocation. It also help to adopt appropriate strategy based on organizational training needs. Performance appraisal analyzes employees performance and which utilize to review the grades and modify the annual pay. It generally reviews each individual performance against the objectives and standard of the organization. Performance management. Creating a work environment and it is enabling the employees to perform best of their abilities. Through performance management companies are hiring efficient people .Then the company building up their skills and talents through employee development programmes.The tools like performance appraisal, performance review, and appraisal forms create the process of nurturing employee developments.
There are chances of opposition for valuation due to fear. If the evaluation system is poor, it will not give adequate effect. Raters problems like leniency or harshness error, central tendency error, personal bias error, contrast error are also affecting the performance appraisal of an employee. Each employee should evaluate by his supervisor and to discuss each other to set objectives for upcoming evaluation. This discussion should cover the review of overall progress, problems encountered, performance improvement possibilities, long term career goals, specific action plan about job description and responsibilities, employee development interest and needs, to concentrate specific areas of development, to review performance objectives and performance standard, ongoing feed back and periodic discussions. Performance appraisals are important for staff motivation, attitude and behavior development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations. Rating can be performed by the committee of several superiors, employees peers, employees subordinates. Apart from these self evaluation also valid. These rating are based on observation, analysis of data and records, discussion with the employee. Feed back of Performance provide an opportunity to discuss strength and resolution of performance deficiencies of an employee. Which also encouraged preparing ratings of their supervisors. Performance appraisal allows a person to grow in what ever the direction he wants to move. Employers promote positive attitude, advancement, and motivation to make the employee to understand their own special potential, and find roles that really fit well.
Developing the whole-person is also an important aspect of modern corporate responsibility, and separately whole-person development is a crucial advantage in the employment market; in which all employers compete to attract the best recruits, and to retain the best staff. The UK Employment Equality (Age) Regulations 2006, (consistent with Europe), effective from 1st October 2006, make it particularly important to avoid any comments, judgments, suggestions, questions or decisions which might be perceived by the appraise to be based on age. Usually performance appraisal used for developmental purpose which also helps to identify the eligible person for reward. It stimulates the performance and making promotions, transfer and discharge decisions. Effective appraisal considering increase in staff productivity, knowledge and contribution. Formal management procedure used the evaluation of work performance. Effective appraisal helps the employer in providing increased productivity, knowledge and contribution from the staff. These resources increase the ability to do performance consulting, measure performance improvement, and provide resultant training using internal staff, which increases self-sufficiency in performance consulting and improvement. Providing feed back about employees job performance and the contribution of reward for their work is very essential in the smooth functioning of an organization. Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:
Performance Appraisal is an objective system to judge the ability of an individual employee to perform his tasks. A good performance appraisal system should focus on the individual and his development, besides helping him to achieve the desired performance. This means that while the results are important the organization should also examine and prepare its human capital to achieve this result. This holds true even for new inductees. Performance Improvement Plans (PIP) are developed for employees at any point in the appraisal cycle when performance becomes Level 1 (unacceptable) in one or more critical elements. This plan affords an employee the opportunity to demonstrate acceptable performance and it is developed with specific guidance provided by a servicing human resources office. Performance Management is the integrated process by which an agency involves its employees in improving organizational effectiveness in the accomplishment of agency mission and strategic goals. Performance Management consists of: performance planning, monitoring employee performance, employee development, evaluating employee performance, and recognition. Performance appraisal system describes how agency will identify performance standards and core competencies and communicate them to employees. Periodical appraisal helps the company to compare employees performance and to take apt decisions for further improvement. A structured business planning depends on the performance of the employee and it will be successful only when the employees are analyzing their work performance individually. The formal performance appraisal in a company is conducted annually for all staff and each staff member is appraised by their line manager.
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Generally employees are appraised based on the structure of the company. Performance Improvement Plans (PIP) is developed for employees at any point in the appraisal cycle when performance becomes Level 1 (unacceptable) in one or more critical elements. This plan affords an employee the opportunity to demonstrate acceptable performance and it is developed with specific guidance provided by a servicing human resources office.
Performance Management is the integrated process by which an agency involves its employees in improving organizational effectiveness in the accomplishment of agency mission and strategic goals. Performance Management consists of: performance planning, monitoring employee performance, employee development, evaluating employee performance, and recognition. Performance appraisal system describes how agency will identify performance standards and core competencies and communicate them to employees. Periodical appraisal helps the company to compare employees performance and to take apt decisions for further improvement. A structured business planning depends on the performance of the employee and it will be successful only when the employees are analyzing their work performance individually. The formal performance appraisal in a company is conducted annually for all staff and each staff member is appraised by their line manager. Generally employees are appraised based on the structure of the company. There is a strong linkage between induction, training and appraisal. In a large number of firms worldwide, a new recruit is expected to discuss his schedule of work in achieving his induction objective.
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This schedule of work becomes a part of his job for the next few months. Performance Appraisal is an important task in every Organization, Company, Firm, Educational Institution, Corporate Management, Government Departments, for effective and systematic functioning of the Institution. Generally, Performance appraisal means, the systematic and concrete evaluation or examination or identification of the work done by an employee. The top level or the selected Management Leaders will perform or conduct this item of work to enable to assess the workability of an employee in relating to the said organizational goal or objectives. The relative worth and stamina or skill of the employee will be reflected in the reports of the Performance appraisal. As a matter of fact, it is really a tool for invention, discovery, identification, examination and analyzing the relative differences amongst the workers, employees with reference to the standards of the job chart, functions, specifications allotted by the Organization. Various systems of appraisal reflect the comparison of an employee with others for ranking or rating. Performance appraisal system is the process of evaluating the performance and qualification of employees in terms of requirements of the job for which he is employed, for purposes of administration including placement, selection for per motions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguish from actions affecting all members equally.
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There are two parties to the appraisal process: the organization, the individual who is being apprised. The appraisal system must generate adequate, relevant, timely and clear information, and result in action program that would be helpful to both the parties. The appraisal should lead up to improved organizational health, viability and growth through optimal utilization of human resources in service of organization. It should also be instrumental in motivating the appraise towards giving his best to the organization. It is evident that if we wish to install an effective appraisal system in an organization, we must first set our house in order. Organization should decide its targets as whole and unit wise and individual employees as well. It should decide upon its resources and information and sufficient guidance to employees to use them efficiently. Is should provide effective supervision and relevant and relatively objective appraisal. A clear definition of organizational purposes, targets and priorities; A participative style of objective setting; clear explanations of roles and responsibilities preferably through talks between manager and his or her boss. Effective managerial man power planning, selection and placement polices and procedures; Realistic development and training programs.
Performance appraisal is the process of reviewing an individuals performance and progress in a job and assessing his potential for further promotion. It includes identification measurement and management of human performance in an organization. It is like any other any personal function, forms eventually line responsibilities although involving assistance and advice. It involves comparisons of performance measures of different individuals holding similar areas of work responsibilities and relate to determination of worth of measures for the accomplishment of organizational goals. It may be define in the following words. It is a joint process that involves both line managers and their direct reports ("subordinates") who jointly identify common goals/objectives which correlate to the higher goals of the organization.
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This process results in the establishment of written performance expectations (a Performance Agreement) - later used as measures for feedback and performance appraisals/reviews. Performance Management is THE WAY to get OVERALL GRIP on what should be happening at all levels in an organization, and then measuring whether it is indeed happening the way intended. And where this is not materializing, to identify the cause/s and implement corrective action/s
Performance Management consists of Four Stages:
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To provide for the above needs of an employee, let's consider what should happen at each stage of the Performance Management Cycle:
Planning Performance: Performance Measures (Goals, Objectives, Targets, KPI's, Competencies, etc.) for individual employees (at all levels) are jointly discussed and agreed during one-on-one, faceto-face meetings with their direct line managers. These are put into a formal, written Performance Agreement for each staff member. (Performance Agreements can also be drawn up for entire work teams in organizations where teamwork is paramount.)
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The most important objectives and benefits of having a sound Performance Management System in place: To serve as the primary vehicle for implementing organizational goals and strategies (cascaded from top to bottom throughout the organization) To align and integrate the goals/objectives and Key Performance Indicators (KPI's) of the organization vertically and horizontally through all job categories and levels, including management. In this way the entire system works together in pointing towards the critical bottom line MEASURES, with bottom line RESULTS generally following as a matter of course To facilitate continuous performance improvement and organization development - the perfect Change Management and Learning Organization tool To achieve quality and efficiency, i.e. to meet the customer's needs as precisely, quickly and cheaply as possible To ensure clarity regarding work expectations and standards, reducing jobholder anxiety/stress, resource wastage and conflict To continually enhance employee competence through the identification of output-related training and development needs and strategies To reduce Line Manager reluctance and fear to do Performance Appraisals with their staff To facilitate performance-based remuneration and rewards, so employees can see and experience a clear link between their performance and the rewards they receive. Not only is the existence of a sound Performance Management and Appraisal System an OPERATIONAL PREREQUISITE for achieving organizational goals, but also a LEGAL REQUIREMENT to prove that proper/due process was followed (backed by a sound documentation and process audit trail) when eventually disciplining -- and especially dismissing -a staff member for persistent poor performance.
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An outgoing evaluation of the quality, quantity, style and determinates of present performance
and behaviour, and the growth potential of and employee, with a view to provide control information to the organizational, leading to an action program and an enabling feedback to the individual, aimed at his performance, improvement, personal growth and satisfaction. Performance appraisal is a systematic, periodic, and so far as humanly possible, an impartial rating of an employees excellence in matters pertaining to his present job and to his potentialities for a better job The personal qualities of an employee, his capability, his industriousness, his tact and temper, his attitude towards the taking up the responsibilities will be appraised through the Performance appraisal. An employees knowledge of the work, department, ability to do the work efficiently, spirit of co-ordination, dependability, accuracy, Interpersonal skills, punctuality,
enthusiasm, intelligence, initiative, zeal, self-confidence, leadership, fulfilment of the goals or objectives to reach the target, are the measurable factors in the system of Performance Appraisal. The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified.
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The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually re cognized. The general model of performance appraisal, as it is known today, began from that time.
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The performance requirements of the organizational must be fully reflected in appraisal criteria. Appraisal system must generate relevant, sufficient, timely and representative information. All appraisers must be trained in the use of appraisal system and in techniques of performance counseling. There should be provision for a peals of appraisals to ensure confidence of employee and there unions. Appraisal system should lead to problem solving rather than fact finding e.g. it must be developmental rather than judgmental. The appraisals programmers must result in clearly define recommendations regarding reorganizations, reward improvements, trainings, promotions etc. The employee should be made of appraisal programs to be implemented and should be encourage expressing themselves freely on performance reports. The appraisee must be evaluated on the basis of determinates of present performance and his major strengths and weaknesses. The P. A. S. should be periodically reviewed in terms of relevance, reliability, usefulness, effectiveness and acceptability. System should not be too elaborate or demand unnecessary efforts from appraiser.
Thus performance appraisal is a process of evaluating an employees performance of a job in terms of its requirements. It facilitates developing and organizational climate of mutuality, openness, and collaboration toward achievements of individuals as well as organizational goals. It is a continuous activity. Performance measures also link informations gathering and decision making process which provide a basis for judging the effectiveness of personal sub division such as recruiting, selection, training and compensation. If the system is implemented efficiently, the management can maintain consistent promotion compensation policies throughout the total system.
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2. METHODS OF PERFORMANCE APPRAISALS

A number of methods of performance appraisals are available. In fact, each organization has its own. This represents variation of one or other of following methods.
This is the most commonly used method of performance appraisal. Under this method, factors to be rated are employee features include quality such as initiative, leadership, cooperativeness, dependability, industry attitude, enthusiasm, loyalty, creative ability, decisiveness, analytical ability, emotional ability and coordination. Employee contribution includes quality and quantity of work, responsibility assumed, specific goals achieved regularity of attendance, leadership offered, attitude towards superiors and associates, versatility.
The degree is usually measured on a scale that can vary from three points (good, average and poor) to several points. The anchor points in most cases are labelled excellent, poor, high low or never always, depending on the format. If traits are merely to be listed, than first to dimensions will be the most appropriate. On the other hand, if a statement such as can he be dependent upon, describes a traits, than never always dimensions are more appropriate. Scales can be presented in three ways:-
A point scale rate anchor define creative ability
Excellent 5 4 3 2
Poor 1
A point scale with both anchors and scales points defined can be relied upon Always Often Sometimes Seldom Never
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A point scale with the features initiative ness and a definition of scale point always, seldom, never etc. To some extent, it overcomes the extract ness of numerical scales. These rating used to be validated against other methods of evaluation. Human behaviour is complex and traits such as job knowledge, experience, ability to get things done etc. are hardly independent of each other. Besides, each may be a composite of similar traits. The validity of rating also depends on raters features. The rating methods may permit two employees to have the same total rating, though on specific traits they might get different ratings. E.g. employees a and b may have a total score of twenty, but there distribution on specific features may vary. Lets look at the distribution given below.
Characteristics Knowledge of job Ability to get work done Sociability Personality Responsibility Cooperation Total
Employees 'A' 3 2 5 4 1 5 20
Employees 'B' 5 4 2 3 4 5 20
If one were to act only on total score, recommendation for A should be similar to those for B. yet A is poor in work related aspects but strong on inter personal behaviour while reverse is true for B. The solution for this problem may be to assign various features according to the organization.
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It is the oldest and the simplest method of measuring the performance, by which the man and his performance are considered as an entity by the rater. No attempt is made to his performance the whole man is compared with the whole man that is, the ranking of a man in a work group is done against that of another. The relative position of each man is tested in terms of his numerical rank. It may also be done by ranking a person on his job performance against that of another member of a competitive group by placing him as a member one or two or three in total group person are tested in order of merit and placed in a simple grouping.
This is the simplest method of separating the most efficient from the least efficient and relatively easy to develop and use. But in practice it is very difficult to compare a single individual with human beings having varying different behaviour traits. Task of ranking individual becomes difficult when a large number of persons are to be rated.
In the paired comparison method, each employee is compared every trait with all the other persons in pairs one at a time the number of times each individual is compared with another tallied on a piece on paper. These numbers yield the rank order of entire group. The supervisors are provided with a bunch of slips each containing a pair of names. The rater puts a tick mark against the individual whom he consider the better of two and final ranking is determined by number of tines that individual is judged better than the others. The maximum numbers of pairs is indicated by the formula N (N1)/2, where N is the total number of employees to be evaluated. For example if five employees A,
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B, C, D, and E are to be evaluated, than above formula 5 (5-1)/2 give 10 pairs which are:-
A with B,
A with C, A with D,
A with E, B with C, B with D,
B with E, C with D, C with E and D with E. to his score. The main disadvantage of this method is that in a large group of employees, the number of permutations and combinations increase requiring more time and efforts from the evaluators.
The essence of critical incident system is that it attempts to measure workers performance in terms of certain events or episodes that occur in performance of rates job. These events are known as Critical Incidents. This technique involves three steps. A test of note worthy on the job behaviour, usually of specific instances is prepared. A group of experts than assigns scale values of them, depending upon degree of desirability of the job. Last step is constructing a checklist that includes incidents which defines goods and bad workers. The supervisors use these lists for evaluating the workers. This method helps to identify key areas in which employees are weak or strong. It emphasis rating of objective evidence rather than on subjective evaluation of traits, finally the supervisors finds counselling easier since he knows subordinates weakness. In this method, the rater is forced to distribute his subordinate in to performance category such as good, poor etc. The individuals rated are distributed along one or more scale and fixed percentage of employees are assigned to the best and worst ends of the scale and to the middle bracket.
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A five point scale for job performance is used. One end of the scale represents best job performance whereas other and poorest job performance. The supervisor is asked to allocate approximately ten percent of his men to the best end of the scale, 20% in the next category, 40% in the middle category, 20% in the bracket next to low end and 10% in low bracket.
Poorest
Poorer than Average 20%
Average
Better than Average 20%
Best
10%
40%
10%
Under job performance scale field review method, a trainer employee from personal department interviews line supervisors to evaluate their respective subordinates. The appraisers is fully equipped with definite test questions, usually memorized in advance, which he puts to the supervisors. The supervisors is required to give his opinion about the progress of his subordinates, the level of performance of each subordinates, his weaknesses, good points, outstanding ability, promote ability, and the possible plans of action in cases requiring further consideration. The questions are asked and answered verbally. The appraiser takes detailed notes of the answers, which are then approved by supervisors and placed in employees personal folder. The success of this system depends upon competence of the interviewer. He can contribute significantly to a reasonably accurate appraisal. He keeps the supervisors on his toes by this evaluation and minimizes his bias and prejudice on his part.
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In most of the government departments and public enterprises in India, performance appraisal is done through annual confidential reports. These reports differ from department to department and from level to level. A very casual attitude is found among raters while filling A. C. R. s of employees working under them. Confidential reports combine different techniques of rating. The confidential report if written for a unit of one year and relates to performance, ability and character of the person during that year. The most importer factor on which the success of confidential report depends is objectivity. The object of maintenance character reports is to put an officer on proper line by pointing out the defect. Irremediable defects touching integrity and morality are not to be communicated.
Confidential character roll recorded by reporting officers is to be countersign by superior authorities. The countersigning authority may take a view different from that of reporting officer, until countersigning authority gives his remarks will not ordinarily be entertained as the very purpose of such communication is to enable the officer to know his failings to rectify them and the officer should profit by it. The communication should not be taken as a matter of argument to enter into controversy.
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Confidential reports have a far reaching influence on the career of employees since their future prospects depend upon such reports and, therefore these should be handled scientifically. Performance appraisal is defined as a structured formal interaction between a subordinate and a supervisor that usually takes the form of a periodic interview, in which the work performance of the subordinate is examined and discussed with a view to identify weakness, strength and opportunities for improvement and skills development.
Performance-Based Actions are the reduction in grade or removal of an employee based solely on performance at the unacceptable level. Performance Plans are the documentation of performance expectations communicated to employees from supervisors. Plans define the critical elements and the performance standards by which an employee's performance will be evaluated. Performance Standards are statements of the expectations or requirements established by management for a critical element at a particular rating level. A performance standard may include, but is not limited to, factors such as quality, quantity, timeliness, and manner of performance. Performance Award is a one-time cash payment to recognize the contributions of an employee and is based on the rating of record. A performance award does not increase basic pay.
Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), 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.
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In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions. By the same token, appraisal results are used to identify the poorer performers who may require some form of counselling, or in extreme cases, demotion, dismissal or decreases in pay. Organizations need to be aware of laws in their country whether this is an appropriate use of performance appraisal - the assignment and justification of rewards and penalties - is a very uncertain and contentious matter. It is important to understand that measuring performance is a fluid and ongoing process, one that can reflect the trusting and honest relationships you want to build with your team. A general rule of thumb is that if the formal appraisal uncovers significant surprises for either the employee or supervisor, the process is unsuccessful. The appraisal process consists of formal meetings where the appraisal is developed and agreed on and where performance is discussed and critiqued. However, the process also involves informal feedback on a regular basis from the supervisor about the employees performance. Critiquing performance as it occurs can be an important It is essential to acquaint yourself with the policies and procedures established by your organizations human resources department on developing and implementing performance Appraisals. This can include the correct forms to be used, the method of documenting work standards, the percentages, or weights, placed on each work standard according to its importance to the overall work effort, and the required documentation and timelines that need to be followed.
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You can easily compromise the appraisal process and managements position with employees by not following the established policies and procedures. It is also important to be sensitive to the impact an appraisal can have on an employee and the work effort of the entire team. Generally, most people take pride in their work and their contributions. Performance appraisals conducted. Base work performance on standards that can be clearly measured and documented. This includes technical requirements of an employees work, as well as interpersonal skills, such as customer service and teamwork. Try to avoid value judgments, such as does not seem committed to his work or does not care about his coworkers. Instead, use specific examples of behaviors that highlight your concerns, such as does not complete tasks on schedule or does not keep coworkers or Supervisor informed of you can also take various approaches to guard against biased appraisals. For instance, you can ask employees to conduct self-appraisals, in which they evaluate their own performances based on the work plans, or you can conduct peer reviews, which gives coworkers the opportunity to evaluate the performances of each other or the overall team. These approaches should not replace the appraisals you perform on your direct reports, but they can help you gather important information to make your appraisals more accurate.
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TRADITIONAL METHODS OF PERFORMANCE APPRAISAL

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. In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behavior as and when they occur. In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias. The rater is given a checklist of the descriptions of the behaviours of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees. In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees .This traditional form of appraisal, also known as "Free Form
method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator. To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. .
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MANAGEMENT BY OBJECTIVE
It is a goal directed approach to performance appraisals in which workers and their supervisors set goals together for the upcoming evaluation period. The rating than consists of deciding to what extent the goals has been met. This approach provides clear and un ambiguous criteria by which workers performance can be judged. It also eliminates subjectivity and the potential for errors and bias that goes along with it with an MBO approach, workers objectives can easily be adjusted at the beginning of a new evaluation period. The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as.
Clarity of goals With MBO, came the concept of SMART goals i.e. goals that are specific measurable achievable realistic, and time bound. The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback. 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 .Although the system being totally objective, this measure still contains certain disadvantages. The major one is that this outcome measure may give a seriously deficient a distorted view of worker performance levels. Secondly, in some situations, human judgment is more relevant than objective measure.
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So, this approach is not fit for every situation that may occur in any organization. Another potential difficulty with outcome based performance based measure is the development of a result at any cost mentality. Although, objective goals and other outcomes measures are effective at increasing performance levels, but these measures may not reflect the entire spectrum of performance
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3. 3600 FEEDBACK
3600 feedback method is the combination of pear, subordinates and self appraisal system. 3600 feedback system is raising rapidity one of the reasons being is the trend of fewer management layers. With so many more employees reporting to one supervisor its just not possible for the supervisor to everyone accurately is out of system with to days emphasize on team work and participate management. In general there are 9 steps involved in a comprehensive 360 process. However, it may be altered with the specific needs and goals of every organization. Determine organizational readiness for 360 degree feedback. Develop an appropriate survey and process for the given organizational needs and objectives Generate enthusiasm among key decision makers and participants. Ensure that participants and managers have the skills to support the process. Provide an orientation briefing. Administer the survey. Coach participants in one-on-one meetings. Provide organizational summary data.Re-conduct the survey (in 4 to 6 months).
This system helps both the supervisors and the workers to go over the list and isolate the causes of any performance difficulty. Self review helps workers to gain insight into the causes of performance problems. The pears and the subordinates judgment help the supervisors to know whether he is aware of or sensitive to the impact of certain factors on the workers performance. The timing and the culture of the organization have to be right for the introduction of these feedback processes. The adoption of a full 3600 approach needs to stem from a steady evaluation in appraisal and development practice.
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Many organization have for some years included a few very mild gesture in this direction headings on the appraises pre pertain. Form, inviting them to identify things that management could do to help them improve performance. It is very unlikely that a 3600 scheme would be accepted where there has been little or no history of appraisal of any kind-it would represent to radical a step.
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4. SIGNIFICANCE OF PERFORMANCE APPRAISAL
P. A. provides valuable information for personal decisions such as pay increases, promotion, demotion, transfers and terminations. Management gets an objective basis for discussing salary increases and promotion with the staff. Thus, performance appraisal serves as the basis of suitable personal policies.
It helps to judge the effectiveness of recruitment, selection, and placement and orientation system of the organization.
It is useful in analyzing training and development needs. These needs can be assessed because performance appraisal prevails people who require further training to remove their weakness. It also identifies individuals with high potential who can be groomed up for higher position.
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5. OBJECTIVE OF PERFORMANCE APPRAISAL
To provide feedback to employees so that they come to know where they stand and can improve their job performance. To provide a valid data base for personal decisions concerning placements, pay, promotions, transfer, punishment etc. To diagnose the strength and weakness of individuals so as to identify further training needs. To provide coaching, counselling, career planning and motivation to subordinates. To develop positive superior subordinate relations and thereby reduce grievance. To test the effectiveness of recruitment, selection, placement and induction programs
The main objective of performance appraisals is to measure and improve the performance of employees and increase their future potential and value to the company. Other objectives include providing feedback, improving communication, understanding training needs, clarifying roles and responsibilities and determining how to allocate rewards. The feedback received by the employee can be helpful in many ways. It gives insight to how superiors value your performance, highlights the gap between actual and desired performance and diagnoses strengths and weaknesses as wells as shows areas for improvement. The method of performance appraisals helps superiors strengthen relationships and improve communication with employees. These appraisals also identify the necessary training and development the employee needs to close the gap between current performance and desired performance. Performance appraisals should clarify roles, responsibilities and expectations of all employees. Performance appraisals reduce employee grievances by clearly documenting the criteria used to make organizational decisions such as promotions, raises or disciplinary actions.
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6. ROLE OF PERFORMANCE MANAGMENT
Performance management is a quickly maturing business discipline. Like its better known siblings sales and marketing, human resources, supply chain management, and accounting and finance performance management has a key role to play in improving the overall value of an organization. Wayne Eckerson of The Data Warehouse Institute defines Performance Management as a series of organizational processes and applications designed to optimize the execution of business strategy. The focus of this book (and its complimentary volume, The Rational Guide to Monitoring and Analyzing with Microsoft Office Performance Point Server 2007) is on the application side of the definition, but it is important to understand how the organizational process works.
This article is an excerpt from The Rational Guide to Planning with Microsoft Office Performance Point Server 2007, by Adrian Downes and Nick Barclay, and is property of Mann Publishing Group (978-1-932577-42-6), copyright January 2008, all rights reserved. No part of this chapter may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, electrostatic, mechanical, photocopying, recording, or otherwisewithout the prior written permission of the publisher, except in the case of brief quotations embodied in critical articles or reviews.
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The fitness program described earlier outlines a strategy for following certain recommended exercises and healthy habits, helping you to achieve your objectives (e.g., becoming stronger, lighter, etc.), and leading towards your goal of becoming more fit. Throughout the program, there may be certain targets to strive for, such as 20 more pushups a month, or completing that 20-minute treadmill run at a higher average rate of speed. Your trainer also uses the program to record your progress from visit to visit, providing feedback on your overall performance and determining whether you are on track towards meeting specific objectives.
Feedback is important to us, because it helps us to further understand why we may or may not be meeting specific targets. Feedback can also be used to modify our expectations, and to set new objectives over the course of the program. In business, a similar process takes place:
Planning what we would like to happen, based on insights from analysis of trends in our industry and events that impact our business. Executing, by making decisions and taking action, based on the outcomes of planning activities. Monitoring our progress towards a certain time-limited target or objective. Analyzing further to understand why we may or may not be on-track to meet a specific target or objective. Forecast what we think will happen, based on what we have analyzed. Here we build one or more scenarios to help us predict certain outcomes. These outcomes help us to confirm or refute our choice of tactics to meet our objectives.
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Illustrates this process.
Figure 1.1: The Performance Management Cycle.
Similar to our fitness program, where progress is monitored and analyzed in areas such as weight loss or number of repetitions for a given exercise, performance management involves monitoring key performance indicators (KPIs) that measure whether an organization is meeting its objectives and overarching strategy. A KPI in this sense is a measure defined by a business that allows for observation of actual values, as they may emerge from line-of-business (LOB) applications and their comparison to established targets (or budgeted values). If a KPI reveals an actual value that deviates too far from (or in many cases, closely approaches) a pre-defined target, then further analysis is warranted. Discoveries made during analysis should help us plan our next steps, set new (or adjust existing) expectations, and predict what may happen based on our decisions. In larger organizations, data from multiple LOB systems are often centralized within a single version of the truth business intelligence (BI) system to optimize KPI monitoring, detailed analysis, and performance reporting. BI systems often (but not always) .
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consist of several layers that work together, helping businesses to: Integrate and refine data from a variety of applications, systems, and documents into a centralized data mart or data warehouse. Analyze refined data to gain insight into current performance (monitoring KPIs), potential causes for specific KPI variances (or deviations of actual values from target values).Report past, current, or forecast conditions to stakeholders.
The goal of a BI system is to ultimately help business people make better, faster decisions. Classically, such decision-making has occurred at higher levels of an organization and been limited to a relatively small number of individuals. However, corporate culture has changed significantly over the last decade, and themes of transparency, accountability, and empowerment have emerged. Performance management frameworks, like Kaplan and Nortons Balanced Scorecard method, build on these notions by making all steps in the cycle (illustrated in Figure 1.1) occur at executive, departmental, and operational layers of the modern organization.
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7. FUNCTIONS OF EMPLOYEE PERFORMANCE

Performance reviews (also referred to as performance appraisals and performance evaluations) serve many useful purposes for any type of organization no matter how large or small. These functions include:
The purpose of a performance appraisal is to provide regular feedback to all employees at all levels in an organization. One of the ways this is achieved is with the use of competencies. Competencies allow an organization to define what job actions and values are important enough to be measured. This also allows employees to understand what actions are important in their job and if they are meeting or exceeding expectations they were hired for
A performance review helps in determining who the key employees in an organization are. It also brings out challenges for the management to keep the rest of the employees motivated and ensure that they keep working at optimum levels. In addition, it allows the management to adopt certain techniques in order to correct the behaviour of the poorly performing employees. Performance appraisals present an opportunity for the management to discuss work responsibilities and agree on common goals with the employees.
The employee and his manager also discuss the employee's objectives at the start of each year or review period. Managers aid their employees in identifying their objectives by making them understand the relationship between their work and the departmental/organizational goals. The manager along with the employee must also work on defining the measurement to be used for the evaluation of each of these objectives.
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This means that both the employees and their managers must agree to the objectives and the evaluation methods involved with them. Employees should not set unrealistic goals, as this will lead to failure and problems with the management in the future. Any education or training necessary for the employee should be identified and arranged for during this process. Many organizations attach the performance appraisal process with actions like merit, promotional or salary increases. An accurate performance review can help determine a percentage increase or decrease in an employees wage, this type of action is more commonly know as "pay for performance" Training needs are identified and development schedules established while discussing performance issues during a performance appraisal. When the entire organization has gone through the performance review process management can use the results for identifying organizational training requirements. Care must be taken to setup a need based training program rather than implementing a companywide training program that results in a waste of essential resources like time, money and man-power. Moreover a skills inventory should be maintained as it determines the skill resources at hand and those that might be needed in the future. Although there is no legal requirement to carry out performance appraisals these usually form the basic documents that support employment actions like work assignments, discipline, promotions and terminations. Performance reviews provide a standardized basis for supporting employment actions since each employee is reviewed with the same method.
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Moreover, performance appraisals form the initial document source for substandard performance in organizations that follow progressive discipline policies. Many organizations use performance appraisals as the managerial recommendation for proceeding to the next job level. This could be as simple as a column on the form indicating whether the employee is fit to move up the ladder in a job family. This kind of practice is very common for union and non-exempt positions.
The formal framework of performance appraisals results in identifying interests, abilities and emerging skills. Moreover, some employees may indicate a strong desire for a particular type of work, which can be a useful input for any future tasks or promotions. Performance appraisals indicate to employees that their managers are observant, knowledgeable and keeps records of events performed by the employees. Employees like to be recognized, which helps to boost their morale for future assignments while maintaining the same service level. Moreover, the managers eagerness to listen and consider an employees opinion reflects on the managers respect and recognition for their employees even when both parties do not agree on certain issues during the appraisal process.
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8. ASSESSMENT CENTRES
Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. Assessment centers simulate the employees on the job environment and facilitate the assessment of their on the job performance. An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies and on the job behavior and potential to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. An assessment centre for Performance appraisal of an employee typically includes: Social/Informal Events An assessment centre has a group of participants and also a few assessors which gives a chance to the employees to socialize with a variety of people and also to share information and know more about the organization. Information Sessions information sessions are also a part of the assessment centers. They provide information to the employees about the organization, their roles and responsibilities, the activities and the procedures etc. Assignments- assignments in assessment centers include various tests and exercises which are specially designed to assess the competencies and the potential of the employees. These include various interviews, psychometric tests, management games etc. all these assignments are focused at the target job.The following are the common features of all assessment centers: The final results is based on the pass/fail criteria All the activities are carried out to fill the targeted job.Each session lasts from 1 to 5 days. The results are based on the assessment of the assessors with less emphasis onself-assessment. Immediate review or feedbacks are not provided to the employees.
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An organizations human resources can be a vital competitive advantage and assessment centre helps in getting the right people in right places. The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees.
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9. SUCCESSION PLANNING
Succession planning is ensuring the right people in the right place at the right time. It is a part of HR planning for the organization and involves finding the right people to take higher responsibilities in the organization. The success of the organization is largely dependent on the quality of its human resources and leaders of the organisations. Succession planning is proactive in nature and results in the creation of a talent pool of candidates with the required potential and competencies who can take the high positions in future and help in the growth of the organization. Succession planning is ensuring the right people in the right place at the right time. It is a part of HR planning for the organization and involves finding the right people to take higher responsibilities in the organization. The success of the organization is largely dependent on the quality of its human resources and leaders of the organisations. Succession planning is proactive in nature and results in the creation of a talent pool of candidates with the required potential and competencies who can take the high positions in future and help in the growth of the organization. Succession planning is being practiced since a long time now and has become an indispensable part of corporate strategy in most of the organisations. One of the best approaches to succession planning is "performance based succession planning".HR planning for the probable future needs is a challenge for the HR managers and the performance review and can help tremendously to attain this challenge.
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Performance appraisal process (like performance reviews and competency assessment) and succession planning together can help to strategically identify and develop the required talent pool. Apart from the various other factors, succession planning is based on: The positions for which the planning is being done. The current and past performance levels of the employee show have the selected employees managed to improve since their last review? The growth potential and the attitude of the employees. Their ability to meet the changing and increased level of standards and measurements set by the management. Succession planning is a complicated process and requires time and ongoing effort. Therefore, performance appraisal and review process helps to judge.
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10. PERFORMANCE APPRAISAL SYSTEMS
Whatever the system used it is important to bear in mind that it is the discussion and communication with the employee about performance and how to improve it that brings the benefit, creating an atmosphere of working together and getting the employee to leave WANTING to do better is what it's really all about, not filling out the forms.
The most common systems are:
Ratings, narrative, rankings, 360 Degree This is the most common form of recording performance; the manager rates an employee's performance on a pre-determined scale. The scale generally varies from a 3 point scale up to a 5 point scale with different descriptors for each point. Different aspects of the job are rated, common distinctions are: Job Performance (What the employee is accountable for doing) Skills (What skills the employee has) Behaviour (How the employee gets the job done) Knowledge (Knowledge about the job) Obviously these can be subdivided again. Job performance for example may have several categories; certainly the most important parts of performance should have their own categories.
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Five level scales are the most common, obviously the greater the number of scales the more discriminatory judgment is required from the manager. With Ratings I would suggest you add additional notes to each section that explain the rationale for the rating and a brief outline of what will be done to improve, if they are not in the top category. If an employee is in the top category I always find it useful to talk with that employee and try and get them to share their secrets as to how they consistently out-perform their colleagues. As mentioned earlier the employee should play an active role in self evaluation and coming up with ways to improve, and the rating should be agreed between the two of you, not just the manager handing it down from above.
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11. PERFORMANCE EVALUATION SYSTEM
Performance evaluations, which provide employers with an opportunity to assess their employees contributions to the organization, are essential to developing a powerful work team. Yet in some practices, physicians and practice managers put performance evaluations on the back burner, often because of the time involved and the difficulties of critiquing employees with whom they work closely. The benefits of performance evaluations outweigh these challenges, though. When done as part of a performance evaluation system that includes a standard evaluation form, standard performance measures, guidelines for delivering feedback, and disciplinary procedures,
performance evaluations can enforce the acceptable boundaries of performance, promote staff recognition and effective communication and motivate individuals to do their best for themselves and the practice. Develop an evaluation form. Identify performance measures. Set guidelines for feedback. Create disciplinary and termination procedures. Set an evaluation schedule. It is also advisable to run the finished system by your attorney to identify any potential legal problems that should be fixed. A performance evaluation system can motivate staff to do their best for themselves and the practice by promoting staff recognition and improving communication. Evaluations should be conducted fairly, consistently and objectively to protect your employees and your practice. An effective performance evaluation system has standardized evaluation forms, performance measures, feedback guidelines and disciplinary procedures. Develop an evaluation form. Performance evaluations should be conducted fairly, consistently and objectively to protect your employees interests and to protect your practice from legal liability. One way to ensure consistency is to use a standard evaluation form for each evaluation. The form you use should focus only on the essential job performance areas. Limiting these areas of focus makes the assessment more meaningful and relevant and allows you and the employee to address the issues that matter most. You dont need to cover every detail of an employees performance in an evaluation.
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For most staff positions, the job Performance areas that should be included on a performance evaluation form are job knowledge and skills, quality of work, quantity of work, work habits and attitude. In each area, the appraiser should have a range of descriptors to choose from (e.g., far below requirements, below requirements, meets requirements, exceeds requirements, far exceeds requirements). Depending on how specific the descriptors are, its often important that the appraiser also have space on the form to provide the reasoning behind his or her rating. (Click below for a one-page evaluation form that covers these essential performance areas without overwhelming the employee or the appraiser.)Performance evaluations for those in management positions should assess more than just the essential job performance areas mentioned above. They should also assess the employees people skills, ability to motivate and provide direction, overall communication skills and ability to build teams and solve problems. You should have either a separate evaluation form for managers or a special managerial section added to your standard evaluation form. (Click below for an example of a performance evaluation form that covers all the areas essential to rating the performance of management staff.)
Standard performance measures, which allow you to evaluate an employees job performance objectively, can cut down on the amount of time and stress involved in filling out the evaluation form. Although developing these measures can be one of the more time-consuming parts of creating a performance evaluation system, its also one of the most powerful. If you have current job descriptions for each position in your practice, youve already taken the first step toward creating standard performance measures, which are essentially specific quantity and quality goals attached to the tasks listed in a job description.
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A job description alone can serve as a measurement tool during an evaluation if, for example, youre assessing whether an employees skills match the requirements of the position. But standard performance measures take the job description one step further. For example, one task listed in a receptionists job description might be entering new and updated patient registrations into the computer. The standard performance measure for that task might be to enter 6 to 12 registrations per day quantity) with an error rate of less than 2 percent (quality). However, standard performance measures dont always work for other subjective areas, such as attitude. In these cases, its still important to be as objective as possible in your evaluation. Dont attempt to describe attitude, for instance; instead, describe the employees behaviour, which is what conveys the attitude, and the consequences of that behaviour for the practice. For example: This employee has failed to support her co-workers. When another member of her department is absent, she refuses to take on the additional tasks required to process patients in a timely manner. This behaviour causes patient backlog, places a burden on staff and compromises effective teamwork. To begin developing standard performance measures in your practice, review the job descriptions for each position and select the key components of the job that can be specifically measured. Then, work with the employees in each position to gather quantitative data, examine historical patterns of volume and determine qualitative measurements that reflect the practices mission and goals. Depending on how large your practice is and how many positions need standard performance measures; you may want to select a committee to develop them.
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Then, with help from the employees in each position, the supervisors should maintain them. Its important to keep job descriptions and standard performance measures as current as possible. Otherwise, when an employee doesnt measure up to the standards youve set, you cant be sure whether he or she has a performance problem or whether your expectations of the position have become unrealistic based on increased volume or a change in circumstances.
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12. PERFORMANCE MANAGEMENT OUTSOURCING
Outsourcing the human resource (HR) processes is the latest practice being followed by middle and large sized organizations. It is being witnessed across all the industries. In India, the HR processes are being outsourced from nearly a decade now. Outsourcing industry is growing at a higher rate. Outsourcing Performance organizations management strive for providing includes cost the saving following benefits to their clients.
outsourcing
components
:Performance
appraisal system Goal setting and the action plans to be followed Developing forms, policies and principles, and procedures Standards or tools to measure performance defining key performance indicators Employee performance Monitoring and feedback management Incentive and benefits planning and administration Feedback integration (Training and Operational Interventions) Severance, Attrition and exit administration. Implementing the complete system in the organization.
Outsourcing gives customized solutions and Performance management outsourcing helps to design or re-engineer the HR processes with the optimal utilization of the resources. Apart from cost reduction, technological benefits and the expert knowledge, outsourcing also leads to value creation, operational flexibility and competitive advantage. Performance management outsourcing does not provide much cost reduction but it yields high quality and quantity in terms of improved performance and higher production
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13. BALANCED SCORECARD BASICS
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950s and the work of French process engineers (who created the Tableau de Bord literally, a "dashboard" of performance measures) in the early part of the 20th century. The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The new balanced scorecard transforms an organizations strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
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This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action.
It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve centre of an enterprise. Kaplan and Norton describe the innovation of the balanced scorecard as follows: The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
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Adapted from Robert S. Kaplan and David P. Norton, Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review (January-February 1996): 76.The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives: This perspective includes employee training and corporate cultural attitudes related to both individual and corporate selfimprovement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. Metrics can be put into place to guide managers in focusing training funds where they can help the most.
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In any case, learning and growth constitute the essential foundation for success of any knowledgeworker organization. Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call "high performance work systems. This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately; with our unique missions these are not something that can be developed by outside consultants. Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups. Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "Unbalanced" situation with regard to other perspectives.
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There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category. Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to
implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system; helps transform disparate corporate data into information.
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14. HALF YERLY APPRAISAL SYSTEM
At a time when many companies are engaged in unrelenting searches for ways to improve operations, reduce costs, fight attrition and increase retention, there is one aspect of organizational life that has gained immense impetus performance appraisal. Since switching jobs is no longer easy nowadays, performance review play a crucial part in ensuring that an employee is to be retained in the organization and is constantly engaged. As the rate of employment continues to decline drastically due to the economic slump, most companies are working towards retaining and strengthening the talent pool that they already have. And in order to achieve that, organizations are introducing half yearly appraisal systems.Nirulas has a half yearly appraisal system, which was started a year ago. This activity was started keeping in mind the dynamic behaviour of the industry. With a half yearly appraisal system, the employee gets feedback twice a year, which gives him/her a chance to re-look at his/her approach of working. Necessary steps are also undertaken for employees who deviate from their goals. They have introduced a comprehensive system of quarterly appraisals where an employee selects his/her own goals or Key Result Area (KRAs) every quarter and him/her self assesses his/her own performance against these parameters. At Spice jet while formally the process is annual, for several of the frontline employees, there are performance related quarterly payouts designed to reward them with incentives for their performance. This has resulted in quarterly assessments which are aligned overall to annual KRAs At Era Group, it was decided in 2002 that they shall have a midterm review for all those who have been performers, thereby creating an expectation amongst the employees of an increase in salary twice a year if they perform well.
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They used to have annual appraisals earlier, but then they felt that the incentives are not enough to motivation the sales department, which generates major revenues or the organization. So, they introduced the system of quarterly appraisals about one and a half year ago. On the other and, though VLCC does not have a half yearly performance appraisal system, they have gone a step further and introduced a monthly review system, three months ago.
Until a while ago, most companies were dong half yearly reviews which meant overall assessing an employees performance in the past six months and giving deserving increments and designation hikes that commensurate with their performances. But now several organizations have revised their appraisal systems and added monetary increments and designation like. At FIHL, they do give monetary increments and designation hikes, according to the performance.
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15. APPRAISAL AS EMPLOYEE MOTIVATION
Keeping in mind the growing attrition rates and the employee dissatisfaction among the employees, the HR professionals are Approaching and using the performance appraisal as a fuel to motivate employees. The latest trend being followed by the HR professionals is to use the performance appraisal and review process as a motivating mechanism. Various surveys and studies have testified the relationship between performance review, pay and motivation Other than the traditional goal of accessing the performance of the employees, Performance appraisals and reviews can be used as a tool to reinforce the desired behavior and competent performance of the employees. One of the most motivating factors for the employees, in the Performance appraisal processes is to receive a fair an accurate assessment of their performance. Inaccurate evaluation is one reason because of which most employees dread going through performance appraisals. An employee always expects his appraiser to recognize and appreciate his achievements, support him to overcome the problems and failures. The discrepancies and the inaccuracies in the performance review can demotivate the employees, even if there has been an increase in the salary. Such inaccuracies can kill the innovating and risk taking enthusiasm and spirit in the employees. Similarly, inaccurate reviews with no hike in compensation can increase the attrition rate in the organization, forcing the employees to look out for other options.
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An employee prefers an accurate performance review with no increase in the salary over inaccurate performance review with an increase in salary. Employees, who receive both accuracy and a pay increase during their performance review, are likely to be the most motivated. Therefore, performance appraisal (review and its consequence in the form of compensation adjustments) has the potential of motivating employees and increasing their job satisfaction.
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16. APPRAISAL AS CAREER DEVELOPMENT
Performance appraisal is a part of career development. The latest mantra being followed by organizations across the world being "get paid according to what you contribute" the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals.
Performance appraisal as Career Development leads to the recognition of the work done by the employees, many a times by the means of rewards and appreciation etc. It plays the role of the link between the organization and the employees personal career goals. Potential appraisal, a part of Performance appraisal, helps to identify the hidden talents and potential of the individuals. Identifying these potential talents can help in preparing the individuals for higher responsibilities and positions in the future. The performance appraisal process in itself is developmental in nature.
Performance appraisal is also closely linked to other HR processes like helps to identify the training and development needs, promotions, demotions, changes in the compensation etc. A feedback communicated in a positive manner goes a long way to motivate the employees and helps to identify individual career developmental plans. Based on the evaluation, employees can develop their career goals, achieve new levels of competencies and chart their career progression. Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.
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17.
LINKING COMPENSATION TO PERFORMANCE
One of the latest strategies being followed in all sectors through out the world for retention and talent management is "linking compensation to performance". Commonly known as "Performance pay" or "Performance based pay", it links the compensation of the employees to their performance and their contribution to the organizational goals. Therefore, periodic performance reviews play a vital role and provide the basis of performance related pay. Commissions, incentives and bonuses, piece rate pay help the employer to pay the employee according to their productivity and hard work. The process of performance based pay involves Deciding and clearly defining the performance goals and the performance measures setting the target bonus for different levels of performances. Measuring the performance of the employee. Giving rewards and bonus according to performance. Organizations are also designing variable.
Merit pay The first step to performance pay, merit pay means setting some basic salary according to the position and the rank of the employee and the variable part of the salary is based on the periodic performance reviews. Profit Sharing the profits of the enterprise with the employees as bonus .Incentives and Performance Bonus Rewards for special
accomplishments or fulfilment of the targets set such as sales commission. Gain sharing Sharing of gains as a result of the increased performance of the employees with them.
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Although performance related pay has always been a topic of discussions and controversies with many arguments against it, but it has also been proved that performance based pay motivates employees to perform better and earn, and encourages learning, innovation, creativity, problem solving and empowerment which can be facilitated through proper performance measurement and reviews.
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18.
PERFORMANCE APPRAISAL TRAINING
Every organization conducts performance for assessing the performance of the employees and the organization. But if not conducted properly, they can give a false impression about the performance of the employees and affect the overall performance of the organization; therefore, there is a need to train the appraisers to ensure the maximum effectiveness of the process. Studies have revealed that appraisals are often conducted by the managers and the supervisor who sometimes, are themselves not aware of the procedures to be followed. They should be explained the importance and the implications of the Performance appraisal to the organizations, the methods to be followed, the principles and the processes of the appraisal. All managers and supervisors who consult performance appraisals should be given training for the following:
How to evaluate the performance and rate the employees .Standards for performance documentation. How to complete a performance appraisal form. How to maintain objectivity in the appraisal.Questioning techniques for appraisals. Responding to employee reactions. Improves rapport and communication. Building morale and motivating employees. Observing and measuring performance. Tracking results. Structuring the interview with the focus on improving performance. Feedback techniques (providing constructive feedback). How to deal with non-performers and people who refuse to co-operate. Post review actions the training can be given by conducting special workshops by professional HR consultants or qualified and experienced HR professionals of human resource management. The venue for the purpose can be a suitable seminar hall, training room, conference hall, boardroom, or at some place away from the workplace like some hotel etc.
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19. PROCESS OF PERFORMANCE APPRAISAL
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards. Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them.
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The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.
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The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance. The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better. Performance appraisal processes are one of the central pillars of the performance management.
According to a few HR professionals, the appraisals have no value for the organization as there is no direct relationship in performance appraisals and the organizational performance. Also, there is no strong evidence to prove that appraisals positively impact the performance of the employees. But the HR professionals who see the organizational performance as a result or sum of the employees performance, argue that apart from the direct benefits to the organization, appraisals contribute to employee satisfaction, which in turn leads to improved performance. For an organization to be effective, the goals, the standards and the action plans need to be planned well in advance.
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Thus, performance appraisal facilitates the achievement of organizational goals. It also facilitates the optimal use of the organizational resources. Performance appraisal is the strength of performance management, which in turn affects the organizational performance. It helps to identify and overcome the problems faced by the employees in their work Performance appraisals a double edged sword Performance appraisal is like a double edged sword for an organization. Although it has many benefits for the organization, various studies have also revealed that performance appraisals have the equal probability of having a bad impact on the organizational as well as the employee performance. Where the performance appraisal improves the work performance and employee satisfaction, it can also demotivate employees and leaving a bad impression on the good employees. Most of the employees do not approve of continuous performance monitoring and performance appraisals, and also consider it as a burdensome activity. According to Professor Kuvaas "Performance appraisals and other tools which involve feedback and target management should be adapted to the employees individual needs and characteristics. Otherwise, there is a risk of harming the good employees without being able to help the less good." Performance appraisal processes can create a sense of insecurity in the working environment and can become an obstacle in achieving the required changes in the attitudes and the performance of the employees. .
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One of the keys of a companys success lies in its productivity. Productivity is a tricky concept and the factors that influence it can be several of which team work and motivation among the employees is certainly not the least. Thus the aim of a good manager should be to create that Dream Team out of his employee structure that will work magic for the company. This article outlines how Melbourne business coach David Guest can help you achieve great team productivity.
First of all, you need to understand the meaning of the word team. Several modern -day management theorists use the idea of the whole is greater than the sum of the parts to describe a team. However this is not quite so. A teams output might also be less than the sum of its parts. Essentially a team is any group of people who are putting their efforts in to achieving a common goal. These efforts need not be equal in quantity or in the type. The goal should be the same though. A Dream Team is a team in which the whole is not only greater than the sum of the parts but is so greater by a far margin.
Team Building is the theory most business coachs uses to ensure that your Dream Team is created out of the employees you already have. First of all you have to appreciate those employees that have been doing good work and at the same time you have to weed out those that are holding back the performance levels of the team and your business. This is where regular staff appraisals and employee dismissals become very useful.
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Appreciation can be shown through genuine praise that is given publicly, monetary incentives as well as through official awards. Such incentives help create a healthy competitive environment among the team members and when done well boost the overall capabilities and output of the team. Importantly, when Team Building you have to be careful not to fall into the trap of what is now being popularly called as the Apollo Syndrome which is essentially choosing the best of the best for your Dream Team; it doesnt always ensure best results. In fact, in most cases, teams filled with individual over-performers have shown to perform poorly when compared to those filled with talented performers who are motivated to work with others. The reason is that over achievers often wish to get the limelight and outshine the others and team spirit takes a back seat. Therefore, it is important for you to make it known that unless the team as a whole performs well individual performance does not mean anything. This is the essence of performance management.
As a leader you need to keep a keen eye out for good performers as mentioned before, appraisals help you to do this and you have to remove the benchwarmers. Its your responsibility to instil motivation and set the goal that supersedes individual performance in every single one of your team and have incentives for good performers but mostly for overall team effort. It is a thin line that the manager has to walk, and a wrong step here or there can result in a loss of morale and productivity.
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When youre struggling to get your team engaged or motivated it may be time to call in an outside perspective of a business coach like David Guest in Melbourne. A business coach will use their extensive business knowledge and experience to point out the adjustments that are needed in your business team to get you on track with your own Dream Team. Performance Evaluation is a tool you can use to help enhance the efficiency of the work unit. This tool is a means to help ensure that employees are being utilized effectively. Employees can use it as a clear indication of what is expected of them before you tell them how well they are doing, and then as feedback of how well they did. Performance Evaluation is a multi-purpose tool used to: Measure actual performance against expected performance. Provide an opportunity for the employee and the supervisor to exchange ideas and feelings about job performance. Identify employee training and development needs, and plan for career growth. Identify skills and abilities for purposes of promotion, transfer, and reduction in force. Support alignment of organization and employee goals. Provide the basis for determining eligibility for compensation adjustments based on merit. Provide legal protection against lawsuits for wrongful termination. The primary purpose of Performance Evaluation is to provide an opportunity for open communication about performance expectations and feedback. Most employees want feedback to understand the expectations of their employer and to improve their own performance for personal satisfaction. They prefer feedback that is timely and given in a manner that is not threatening. Many benefits result from the Performance Evaluation process: Control of the work that needs to be done. Enhancement of employee motivation, commitment, and productivity. Identification of goals and objectives for the employee.
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Satisfaction of the basic human need for recognition. Identification of process improvement opportunities. Identification of employee development opportunities. Each agency, department, and institution shall adopt and use a program to provide for the development and management of the performance of each employee in a classified position.
Each employee in a classified position must be informed of the responsibilities assigned to the employee's position and of the level of performance needed to successfully perform the work. Each agency, department, and institution shall use the criteria in one or the other of the following performance management program types: Individual-based performance. Performance reviews are conducted at least annually. Performance reviews are based on individual job-related requirements. A standard form or approach is used. Performance standards, or goals and objectives are used. The review includes a review of past performance. The review includes a discussion of how performance may be improved or how an employee's skills may be developed. Team-based performance. Performance reviews are conducted at least annually. Performance reviews are based on overall team performance and how the employee functions as part of a team. The emphasis of the program is on improving the quality of a service or product, constantly improving systems and processes, and on preventing problems and eliminating them. The program provides guidance for the education, training, and selfimprovement of the employee.
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Performance evaluation is most effective when employees are actively involved in open discussion about their own performance expectations and about how they are doing in meeting those expectations. Involving the employee in the performance evaluation process will make it a meaningful, worthwhile experience for you, the employee, and the organization because employees: need and want to have their voices heard, are more likely to consider the system as being fair if they have involvement and understand the process, and are more likely to demonstrate genuine commitment to goals and performance. Ultimate benefits realized by the organization will be increased productivity, efficiency, job satisfaction, and morale and decreased turnover.
You should be able to assess, evaluate, and distinguish between different performance levels. The end result can be identified in terms of quantity, quality, time lines, acceptable standards, or procedures. Many say the work they do is not measurable. But if it is not measurable, how then do they know if a goal has been met and if their contributions have value? Definitive results can be identified for all work. Each performance expectation should be one that can be achieved by the employee without barriers that hinder its completion. However, it should not be so easily achieved that the employee is not challenged nor so difficult that the employee becomes frustrated. It should be reasonable. Each expectation should be an actual requirement of the employees job and within the parameters of the position description. Each expectation should have a time frame associated with it daily, weekly, etc.Some factors for which expectations may be set forth and measured are: Job Knowledge, Quality of Work, Quantity of Work, Work Habits, Cooperation or Ability to Work with Others, Oral and Written Communications.Previous deficiencies in performance. Have they been corrected or do they continue to be a problem? If deficiencies continue, note them in the evaluation. Omitting a continued deficiency in
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subsequent evaluations can be interpreted as a sign that the deficiency has been corrected.
Determine whether your rating of the employee is consistent or whether the performance actually has changed. When there is a significant negative change in performance, the supervisor should give the employee notice, prior to the annual evaluation, that the next evaluation will be significantly lower unless substantial improvement is made.Analyze performance to identify gaps between expected performance and actual performanceAnalyze the causes of gaps .Organization or work environment-related causes. System or processrelated cause Personal causes. Select and design an action plan to close the gaps a plan that meets business needs, performance needs, training needs, or work environment needs implement the plan.
Follow up - Measure and evaluate the impact of the plan on the performance. Management often assumes that where actual performance falls short of expected performance, employees must try harder. However, it is very important to analyze why a gap exists between expected performance and actual performance to determine if there is a cause other than inadequate employee efforts. Most causes will fall into three categories. Organization or EnvironmentRelated These gaps can stem from the organizational culture, leadership style or management practices, organizational structure, reporting relationships or chain of command, inadequate resources (funds, staff, equipment, training, information, etc.) and so forth. Some examples: employee reports to more than one supervisor, performance expectations were not communicated, or expectations were not met because the employee was overburdened due to staff cuts. System or Process-Related System or process-related causes can relate to any process within an organization that becomes a roadblock to an employee meeting performance expectations.
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Some examples: time frames or procedures are burdensome, procedures conflict, someone else didnt meet their time frames, or the information reporting system is inadequate. Personal These are gaps that are within the employees realm of control. They can, for example, deal with situations that are going on in home life that affect work performance or depend on the employees physical or emotional abilities. Lack of effort, motivation, or concern for the agencys efficiency can also fall under this category. Exercise caution when dealing with personal issues remember to keep it job related, focusing on how job performance is affected. If an employee alleges that a medical condition is the cause of poor performance, contact your human resource officer or legal counsel at once. Do not attempt to resolve employees personal problems. The cause of a performance gap may overlap a couple categories. It is imperative that you and your employee communicate to identify the cause of the gap and arrive at solutions to eliminate or minimize the gap. Before the performance evaluation meeting:
At least one week in advance, schedule a meeting with the employee and inform him or her of what to prepare for, i.e. self-appraisal, etc.Complete your review and documentation of the employees performance, considering observations, records, and feedback from others. Focus on what the employee did and didnt do, not the employees character or personality, unless the character or personality affects job performance and the employees effectiveness to the organization. Arrange for a private office or room free of distractions for the meeting. During the meeting: Put the employee at ease through informal conversation. This will enhance the free exchange of information. You can also discuss the purpose of the meeting and what you hope to accomplish. Go through your evaluation. Be specific and candid in presenting your evaluation. Listen to employee feedback, take notes, and ask questions. Share feedback received from others. Explore areas of disagreement and attempt to reach consensus so that the employee will
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be motivated to change his or her behaviour.
Discuss areas for improvement and performance expectations for the next period.Establish a realistic and appropriate improvement plan if performance is below expectations. Encourage the employee to record his/her comments about the evaluation, and have the employee sign the copy to be filed. If the employee refuses to sign, the agency head or the agency heads designated representative should, in the presence of the employee and a witness, indicate on the copy that the employee was shown the material, was requested to sign acknowledging that the material was read, and that the employee refused to sign by (signing the copy, the employee does not indicate agreement only that the material has been read.
Provide the employee with a copy and place a copy in the employees official personnel file.Not all performance evaluation methods work equally well in every organization one size does not fit all! It is important to consider the categories of employees to be appraised (i.e. managers vs. non-managers), the types of jobs performed, the nature of the relationship between employees and managers, the purpose(s) which the evaluation is intended to serve. Other factors are the availability of in-house expertise, developmental costs, and how easy is it to use. At the core of all successful evaluation formats are clearly defined and explicitly communicated standards or expectations of employee performance. Employees must understand what is expected of them. Descriptions of the various performance evaluation methods can be found in the of this section. You, as a supervisor, should visit with your human resources office or a representative from Human Resource Management Services regarding implementing a strategy or using a technique that will best serves your needs.
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There are many errors that supervisors unconsciously make during performance evaluation. A few of the most common are: Central Tendency Rating everyone at or near the middle of the scale to avoid the need to justify extreme positions. Positive/Negative Leniency Rating higher or lower than the employee deserves because you want to motivate them to do better or because you think there is always room for improvement. Halo (or Horns) Effect A single favourable or unfavourable incident colours the evaluators judgement of the employees overall performance.Recency Effect A recent event colours the perception of the employees performance for the entire period. Similar to Me The tendency to rate employees similar to yourself higher and those not similar lower. Conflicting Purposes of the Evaluation Process As you saw at the beginning of this Chapter, there are many purposes for performance evaluation. Because time may be scarce and performance evaluation is seen as time consuming, the same management tool may be used for many purposes.
Sometimes those purposes conflict. For example, if the employee has inadequate performance and is not eligible for a salary increase, it will be difficult to get the employee interested in discussing training and development opportunities. The employee is concentrating on how s/he can get the supervisor to increase their salary. A technique to emphasize the performancerelated aspects of the evaluation process is to conduct performance evaluations at a time that does not coincide with annual salary adjustments in July. Alternatives to conducting performance evaluations in June or July are the employees employment anniversary date, a calendar year schedule, or another notable date. Another conflict in the evaluation process is when an employee is rewarded with a promotion based only on good performance, without focusing on the requirements of the new job versus the employees qualifications.
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If you are using performance evaluation as an indicator of future performance, ensure that the factors that were evaluated in previous positions are reflective of what is required in the new position. Many of the same laws listed in the Employee Selection section, apply during any phase of the employment process or relationship including performance evaluation. To minimize the risk of violating legal requirements: Ensure that the evaluation is accurate and truly reflective of the employees actual level of performance. Ensure that the evaluation encompasses the entire review period and reflects performance variations during the period. Ensure that evaluations are based on what employees are actually required to do as stated on the position description or as otherwise assigned. Be cautious in making subjective judgements. Stick to facts that can be documented. Keep a record or notes in a working file, if need be, of occurrences that might be disputed.
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20. EMPLOYEE PERFORMANCE MANAGMENT
Creating a link between employee performance and the goals of your company is critical to success. Motivate your team and increase productivity with accurate and timely performance reviews and appraisals. Team Respond employee performance management enables faster evaluation and planning with improved consistency, fairness and quality. And the Software as a Service (SaaS) approach helps you to save on implementation costs. The appraisal process is sometimes seen by managers as extra work. You can lighten the load with easy to use review templates, performance improvement plans, development plans and many other time saving features. Performance Appraisals Quickly and easily create performance reviews for all employees using flexible review templates. Performance can be measured against company, department, position, and/or employee-specific goals. A combination of numeric ratings and comments-based evaluation ensure measurable and actionable feedback Goals Establish S.M.A.R.T. goals and define expectations so that employee goals are aligned to those of the organization, engaging the workforce and improving productivity. Development Planning Create plans that encourage employees to further their personal and professional development.
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Monitor progress and help them to stay on track. Performance Improvement Planning Provide performance improvement plans for employees that have performed below expectation. Link plans to performance reviews so that targeted areas for improvement can be worked on.360 Degree Assessments Generate a balanced assessment of performance using multi-rater feedback (360 feedback). Self reviews and peer reviews complete the picture for more insight of employees' skill gaps and development requirements. Live Update Managers and employees can store information on performance related events at any time during the year. This makes the appraisal process more accurate where events would otherwise have been
forgotten.Reporting & Analysis. Get instant reports on all performance metrics or schedule reports to generate automatically and keep you informed by email
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Employees are important in any running of a business; without them the business would be unsuccessful. However, more and more employers today are finding that employees remain for approximately 23 to 24 months, according to the 2006 Bureau of Labour Statistics[citation needed]. The Employment Policy Foundation states it costs a company an average of $15,000 per employee, including separation costs, paperwork, unemployment; vacancy costs, including overtime or temporary employees and replacement costs including advertisement, interview time, relocation, training and decreased productivity when colleagues depart. Providing a stimulating workplace environment, which fosters happy, motivated and empowered individuals, lowers employee turnover and absentee rates.[11] Promoting a work environment that fosters personal and professional growth promotes harmony and encouragement on all levels, so the effects are felt company wide.[11]
Continual training and reinforcement develops a work force that is competent, consistent, competitive, effective and efficient.[11] Beginning on the first day of work, providing the individual with the necessary skills to perform their job is important.[12] Before the first day, it is important the interview and hiring process expose new hires to an explanation of the company, so individuals know whether the job is their best choice.[13] Networking and strategizing within the company provides ongoing performance management and helps build relationships among co-workers.[13] It is also important to motivate employees to focus on customer success, profitable growth and the company well-being.[13] Employers can keep their employees informed and involved by including them in future plans, new purchases, policy changes, as well as introducing new employees to the employees who have gone above and beyond in meetings.[13] Early engagement and engagement along the way, shows employees they are valuable through information or recognition rewards, making them feel included.[13]
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When companies hire the best people, new talent hired and veterans are enabled to reach company goals, maximizing the investment of each employee.[13] Taking the time to listen to employees and making them feel involved will create loyalty, in turn reducing turnover allowing for growth.[14]
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21. ELEMENTS IN THE APPRAISAL PROCESS.
At one stage performance appraisal relied mainly on assessment of personality characteristics. Subordinates were being appraised by their superiors on the extent to which they exhibited characteristics like tact, willingness, enthusiasm, and maturity. Managers were being put in the position of psychologists and required to make subjective ratings without any point of reference except their own opinion. More recent thinking has resulted in an approach which says that there are two important aspects in performance appraisal namely inputs and outputs. Inputs: What the individual brings to the job in terms of attributes, behaviour, skills and knowledge are inputs. Outputs: The results achieved in terms of outputs or outcomes are referred to as outputs. Expectations are expressed in terms of objectives, standards, standards, targets or competence and appraisal is made on the basis of inputs and outputs. Three different approaches exist for appraisals. Employees can be appraisal against absolute standards, relative standards and objectives. In cases where absolute standards are used, the employees are not compared with any other person while in the second category of appraisal methods using relative standards, individuals are compared with other individuals. The third approach makes use of objectives. Employees are evaluated by how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of the job.
When Appraisals should Take Place Most large organizations hold formal appraisal discussions annually, while some fast moving organizations prefer to have them twice a year. When employees are working on projects, there may be an appraisal after each assignment has been completed.
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Ensuring that Appraisal is a continuous Process to ensure that appraisal is not just seen as a oncea-year event to be got over as quickly as possible it is necessary to emphasis the continuing nature of the process on briefing and training. Performance appraisal should not be imposed on managers as something special they have to do. It should be treated as a natural process which all managers carry out. Performance appraisals are an integral part of every organization and if they are properly developed and implemented, they can help the organization achieve its goals by developing productive employees.
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22. DEVELOPING A GOOD APPRAISAL SYSTEMS

End of the year appraisals are always a matter of heartburn and disgruntlement among employees. It is only very rarely that all employees find the appraisal system fair and reflective of their real performance. For managements too, conducting such appraisals is a matter of trepidation. This is more so for companies that are still to develop a strong performance evaluation system. But appraisals have to be done and they are critical for rewarding and retaining talent. They are also important for attracting talent as good performance evaluation systems help to build the employer brand. This article offers a few suggestions as to how you can develop a sound performance appraisal system. In a good formal appraisal system everything should be written down. A good performance appraisal system should allow for providing supporting documentation so that when action is taken based on the appraisal, the fairness and relevance of the appraisal can be scrutinized and the entire process made transparent. There is already a lot of literature on how to develop a sound performance appraisal system and HR managers would do well to study them before launching any new system.
The key idea behind a good performance evaluation system is to reward rather than punish or meet legal requirements, help to lay down and communicate clear performance goals and measure progress, help identify laggards and whether they need any specific help in terms of training and mentoring that can enable them to improve, help identify bosses who are stifling talent or are in some way or the other standing in the way of better realization of an employees potential and on the whole lay down a solid channel of communication between employees and the top management. Any good appraisal system should take care of all these goals.
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The appraisal system should be simple, easy to understand and easy to use. Since a good appraisal system almost always require a participatory approach on the part of the boss and his subordinates, the paper work should be kept to a minimum and as simple as possible. A basic and standardized form is highly recommended as it would enable an open, transparent and uniform appraisal process for all employees. To take care of specific needs of specific departments, standardized forms for Standardized forms and a uniform system can lead to too much rigidity. Hence, allow for flexibility even within the uniform format. This may be especially relevant in small businesses where one person may have several unique competencies and may be looking after several different functions of different types. Have a system that can take care of such situations so that even as it allows flexibility, it also minimizes the risk of arbitrariness. A good appraisal system always allows employees to participate in the review process. Employees must be allowed to give their own selfappraisals by giving them an opportunity in the appraisal form to list their own strengths, weaknesses and goals for the coming year. During the review compare notes and finally try to come up, as often as possible, with an appraisal that has the employees consent. If you own a business it is likely that you will work night and day or for that matter do whatever it takes to make the business successful. But you can hardly expect your employees to have a similar attitude, although there are people who do show as much commitment. So be realistic and set such goals that are achievable. Try to customize goals to individual employees so that each have a realistic chance of meeting those goals. Nothing motivates an employee more than being able to meet goals and being recognized for the success. Goals that are too tough and which most are almost sure to fail to meet can only help to demoralize your staff instead of egging them on to raise their levels of performance.
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Instead if you raise the bar gradually and in a way such that more people succeed in meeting those goals than fail, over a period of time you will be surprised to find how much people have progressed. A well-designed and well-executed performance appraisal process will enable you and your staff to arrive at clear and achievable goals that both you and your staff have agreed to achieve. Adjust your business plan accordingly so that the performance review should end up with giving you a far more workable business plan which will, more often than not, succeed while helping to retain talent by keeping employees satisfied.
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23. BENEFIT OF APPRAISAL
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive. Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus the performance of the whole organization is enhanced.For many employees, an "official" appraisal interview may be the only time they get to have exclusive, uninterrupted access to their supervisor. Said one employee of a large organization after his first formal performance appraisal, "In twenty years of work, that's the first time anyone has ever bothered to sit down and tell me how I'm doing."The value of this intense and purposeful interaction between a supervisors and subordinate should not be underestimated
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24. SETTING UP A PERFORMANCE MANAGEMENT SYSTEM
Setting up a good performance management system doesn't happen overnight or by accident. You need to consider its design and carefully plan how it will work before managers begin using it to evaluate employees. A performance management system should provide employees with these four basic benefits: A clear understanding of job expectations .Regular feedback about performance, Advice and steps for improving performance.Rewards for good performanceThe goal of a performance management system is to help boost employee performance and, ultimately, the productivity of the business. For it to be effective, a performance management system should incorporate the following critical elements:Updated Job Descriptions .Job descriptions should clearly describe the employee's current duties and performance expectations. Position descriptions should be specific, clearly defining the job function, required skills, deadlines and goals, and should delineate expectations for the employee's relations with peers and customers.Keep job descriptions current, especially during times of organizational change. Rapid growth and downsizing inevitably add new responsibilities and shift employees' workloads. Performance Measures and
Standards .Once you have job descriptions in place, you need to establish performance standards that describe what constitutes below-average, average, and above-average performance. Start by thinking about the best- and worst-case scenarios until you reach realistic standards for measuring performance. Next, determine how you're going to measure the expectations outlined in the job description. This requires both objective and subjective methods of assessment.
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In some situations it's easy to gauge performance by looking at the numbers: for example, how many new accounts an employee brought in or how many products an employee assembled. Quantifying an employee's coping skills, customer service skills or attitude is much more difficult. Some managers also have biases or poor evaluation skills. Establish clear guidelines and measures that eliminate potential bias and prevent evaluators from subjectively determining what constitutes excellent and unacceptable behavior.
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25. EVALATOR TRAINING
Research shows that managers with poor communication or interpersonal skills are often the downfall of a company's otherwise sound performance management program. All managers need training on how to communicate and how to conduct fair, nonjudgmental and consistent appraisals. An effective performance management system will administer training to managers before they conduct their first reviews. Guidelines for Improvement Institute basic policies to cope with employee weaknesses and poor performance. Decide if you'll provide training or mentoring for employees exhibiting subpar performance. Set guidelines that outline how long it should it take an employee to improve and what steps will be taken if the employee fails to show improvement. Employee Input Solicit and evaluate staff suggestions for your performance management program. Incorporate employee input into your program or system as needed. Compensation and Rewards When your employees perform well they should be compensated. Rewards keep morale high, generate loyalty and foster additional improvement. But closely linking pay hikes and promotions to performance appraisals is a contested issue. Critics say that too close a tie between performance evaluation and compensation may be punishing or unfair to employees who don't overachieve. Regardless of how and when you choose to compensate your employees, an above-average appraisal deserves acknowledgment. Make sure you consistently reward employees for their hard work.
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26. RECEVING FEEDBACK FORM SUBORDINATES
Even if an entire 360 Degree Appraisal System is not implemented at the very least a system should be in place that lets subordinates appraise their managers, after all this is the main job of the managers and they need a system to let them know how well the are doing. On a personal note: In my management career something that was a real watershed for me and transformed how I thought about managing was when we had an exercise carried out by a Human Resource consultant. It was my first business, a start up and at that stage I had grown it to having 7 branches with 7 managers. The exercise involved the facilitator explaining that I was no longer the boss in the room, he was, and he was running the show, not me. We were all treated as equals and each person in the room had to sit in the chair at the front and be told by all the others, one person at a time:3 things they were doing that were good and should carry on doing .3 Things they were doing that were bad and should stop doing.3 Things they were not doing and that they should start doing. The person receiving the feedback was not allowed to speak, which in the beginning was difficult for me, I wanted to start defending my position but was told by the facilitator I had to keep quiet. When you think you have been doing a great job and you have the luxury of being the boss and never hearing any different you can get lulled into a false sense of competency. Hearing negative feedback is never a pleasant experience but it is absolutely invaluable to hear from the people you manage how you are doing.
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I didn't enjoy hearing 7 people telling me what I was doing wrong but when I thought about what they said I realized they were right and it forever totally changed, and improved, the way in which I managed. Since that day, I always built into every business I have run, a system for managers to receive feedback from the people they manage, on how they are doing and it forms an integral part of the managers appraisal system. With regards to the system being anonymous what I have found most useful is to make it optional whether or not individuals want it to put their name to it or not. If you have a good relationship with the people you manage more often than not they want to put their name to it because they want to discuss the matter with you and know you will respect their opinion and not get defensive.
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27. ADVANCEMENT & EMPLOYEE PERFORMANCE
Employee advancement opportunities are central to strong job performance. Advancement and opportunities for promotion encourage stronger job performance because they position employees to demonstrate just how well they can perform their jobs. The cycle of advancement, motivation, satisfaction and feedback are critical to employee performance. One part of the cycle is dependent on the other, and they are all part of employee performance.Advancement.Employee advancement isn't always a formal promotion, although many times it is an official transfer from one position to another. Advancement also can be a lateral move, such as a litigation attorney making a lateral move from one law firm to another. Generally, a lateral move of this type presents some benefit to the lawyer who's likely on a partnership track. Therefore, even lateral moves are part of employee advancement. Advancement forces performance -employees who move upward or laterally have an obligation to their employers to prove they are worthy of the promotion or demonstrate their skills with another employer. Motivating employees is easier than it sounds, and best accomplished through recognition. Recognizing employee strengths costs very little, yet it has tremendous rewards for both employers and employees. Employees who demonstrate special talents or high proficiency deserve recognition. Employers should most appropriately recognize employee talent through promotion. Promoting employees to leadership roles encourages better performance; it is a form of advancement that may be temporary or permanent.
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Nevertheless, employee motivation through recognition enhances performance levels, which satisfies employees' intrinsic needs to do good work, and satisfies an employer's need to sustain a productive workforce. When employees contemplate looking for another job, it's usually not because they want more money or for better benefits. Many times, when an employee tenders a resignation, he cites reasons for his departure that have nothing to do with money. Dissatisfaction is one of the primary reasons for employees to leave for employment elsewhere. Based on Saratoga Institute data from almost 19,700 survey responses, Leigh Branham summarizes the reasons why employees leave in her article, "The Seven Hidden Reasons Why Employees Leave." She states: "The desire to be recognized, praised, and considered important is our deepest craving, yet 60 percent of employees say they feel ignored or taken for granted." Employees who leave are looking for work that's challenging and the opportunity to demonstrate their capabilities -- they're looking for job satisfaction and job satisfaction is essential to employee performance. Employees who are complacent, bored or just unhappy with their jobs lose interest in work, and their performance declines. Satisfaction through advancement or employee recognition can cure that.
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28. POOR EMPLOYEE PERFORMANCE?
When you own and operate a small business, critical for your employees to maintain high levels of job performance. A small business is dependent on employees who know their job duties and responsibilities well. You depend on your employees to dedicate their best performance to your business. Inevitably, there will be times when an employees job performance falls below your expectations and your department manager will need to address the issue of your employee's failure to meet your performance standards. The key is communication, however. Demonstrate your concern for your employee's performance through communication. According to advice the NFIB lends to small business owners, performance problems can be resolved through early and effective communication between an employer and the employee. The employees may not even be aware of the change in their performance." Your attentiveness to your employees' performance will pay off in the long run when you see how employee performance translates to business performance. Observe your employee's performance and make notes of the deficiencies you notice. You will need to have concrete information when you address the issue of poor performance, instead of merely complaints from the employee's team members or hearsay. If you are the employee's direct supervisor, consider a reverse job-shadow where you actually work with the employee as he completes his job tasks. If this is not practical, consider asking the employee to maintain a diary that outlines the steps he uses to perform each of his job duties.
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This will serve you well in addressing the performance issues, and it will also benefit your department in creating a file of process sheets for each position. Discuss your observations with the employee. Encourage your employee to share any issues, concerns or reasons why the deficiencies you note are occurring. There may very well be a reasonable explanation for the drop in job performance which is out of the employee's control. For example, in a production facility, perhaps there is a machinery malfunction, operational issue or delay in receiving materials from another front-line employee. Share your concerns for the poor performance you witnessed and suggest ways for improvement if it is within the employee's purview to correct the issue. Depending on the type of work performed, this conversation may need to take place at your employee's workstation; otherwise, any other discussions about job performance should always be conducted in a private setting. Engage the employee is a results-oriented discussion about her job performance. Ensure he has the tools necessary to perform the job, and that he fully understands the company's expectations. Open up to possible discussions about personal issues which may be spilling over into the employee's job performance. If the personal issues are serious and demand immediate attention, remind your employee of the services provided by the employee assistance program. Otherwise, move forward to discuss a performance improvement strategy for developing his skills and modifying behavioural issues that may underlie the poor performance. Present options available to the employee. Explain the company's progressive disciplinary process or another way to improve performance, such as a performance improvement plan. The disciplinary process should be used if you believe the employee's poor performance
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is due to a reluctance to follow procedure or if the employee demonstrates a lack of concern for the poor performance and his role within the company.
If he exhibits behaviour that indicates he wants to improve and is open to suggestions as to how best to raise his performance level, consider the performance improvement plan. Ensure the employee understands that performance management is not just an episodic event that occurs annually with the performance appraisal. Performance management extends from the
employee's hire date until her retirement date, and issues discovered early on can be immediately corrected. Have the employee take an active role in determining the root cause of his poor performance how he believes it can be solved.
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29. CAUSES FOR POOR EMPLOYEE PERFORMANCE
Many times, employee performance is affected by difficult situations. Your management skills are going to determine whether performance issues continue to the point of destroying your business or are dealt with professionally and effectively so work can continue. Help your employees whenever you can with such concerns as health issues, home life problems and their relationships with other workers and management. Prompt attention to situational causes of poor performance will help ensure the smooth running of your operation. Health Managers must understand how hard it is for an employee to perform at his best when he is suffering from an illness or is injured. Good health is vital for giving an employee the energy, alertness and comfort required to perform all the work he is assigned. Help your employee maintain or regain health by encouraging and making it possible via his schedule for doctor visits. You can also help with the implementation of healthy measures such as stocking the work place with healthy snacks, bottles of water, a clean and hygienic environment and a comfortable break area in which employees can go to refresh themselves.Employees who have a good home life are likely to be happy and productive on the job, while workers experiencing hardships in their off time are likely to see a deterioration in work performance. You can help employees improve their lives outside of work with the establishment of an Employee Assistance Program that addresses many types of issues including mental health concerns and substance abuse.
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Also, according to the Sloan Center on Aging and Work of Boston College, you as a manager need to extend as much flexibility as possible to an employee in need. For example, you should help the worker in developing a work schedule that allows him to balance out work and life issues. When employees have a trusting and congenial relationship with others in the workplace, they are able to perform well. Unfortunately, disagreements among employees can result in a tense environment where work proceeds slowly. Managers should note that when employees are angry with one another or worried about how they are perceived, it is impossible to concentrate on producing good work. Open your door to employees who are experiencing problems working with one another so everyone can speak their minds. Ask specific, straightforward questions about what is happening so you can aid the employees in working out the problems, making sure they can return to their work in a tension-free atmosphere. According to Lisa Rothberger, writing for Corp Magazine, performance feedback is essential in the workplace. Your employees must know the areas in which they are strong and what needs to be improved so they can work effectively. Frame your feedback in a positive way by citing employee strengths first, letting them know you believe in their abilities to address particular aspects of work and tell them how much you appreciate their hard work and flexibility. Give consistent feedback so you and your employees are always up to date on all performance issues.
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30. ANNUAL EMPLOYEE REVIEWS
Annual employee reviews examine employees' work performance for a company over a whole year of employment. These annual reviews are important because they highlight the employees' performance for potential advancements, raises, promotions or even probation, if the employees are not performing as expected. Annual employee reviews must be prepared in advance so the employer knows what to say to those getting reviewed. Prepare one employee evaluation at a time. The employee's file will have a brief job description, current salary, previous employee reviews and their results. This information shows you how a single employee has progressed within the company through positive reviews and promotions. In addition, it will also show you if an employee is simply doing the expected amount of work but not really surpassing the expectations. Read through the chosen employee's file and examine notes and letters written by managers. For example, managers document any excellent performances and tasks that have been completed by the employee over the previous year. The employee file will also contain any warnings, suspensions, poor sales records, employee of the month recognition and awards the employee may have received during that time period. Provide the employee with a blank form with questions regarding his performance in the workplace. The employee must conduct a self-assessment.
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The assessment should include the employee's opinion on how well he worked towards the company's goals, met the individual goals of the position, and how he works with managers or department leaders. Compare the employee's performances during the past year to performances from previous years to determine whether he has shown improvement. Take the employee's personal assessment into account when it is returned to you. Keep the entire year in mind, not just recent events. For example, if the employee has been performing poorly in the past few months after getting a promotion, examine his strengths and weaknesses to see if the promotion was the wrong choice. Write the annual employee review. The employee should get a copy of the review and you must leave a copy in the employee's folder. Start with appraisal so the employee knows what he is doing right in the position. Present both the positive and the negative information in a neutral tone so the employee does not feel attacked, criticized or harassed. It is important to write the review neutrally since it is used as a guide during the oral employee review. Prepare the oral employee review by presenting the employee with a copy of the written review first so he knows what to expect. Include various managers' opinions and feedback so the employee knows the opinions or perceptions in the annual review are not just yours. Discuss potential changes in the upcoming year and present them as a guide for the employee to follow in order to improve. Reward above-average performances with promotions, raises and awards, while handling improvements or warnings with respect and motivation.
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31. BAD PERFORMANCE REVIEWS

Getting a performance review can be a harrowing experience for an employee, particularly if the news she is going to receive is not good. Bad performance reviews happen, and delivering the bad news is not an easy task, especially in a close-knit company. However, with the right approach, delivering bad performance reviews can be a positive experience both for management and for the employee. Always begin the performance review with positive information about the employee's performance. Even if you have to dig for it, find something that the employee has done correctly and praise him for it. Starting off on a bad and negative note will immediately place an employee on the defensive and will change the entire tone of the review. Letting him know what he has done correctly will help soften the blow of the bad news, and help the employee know that you do care about him on a personal level. Even the worst news can be presented in a positive light with the right word choices. While you don't want to gloss over mistakes, particularly if they are severe, the way you break the news to the employee will have a big impact on how she receives it. Instead of "Your performance was the worst this company has ever seen," try something along the lines of "One area that we felt could use improvement was 'x' and here is what we had a problem with. Constructive criticism is an art, and it should be practiced carefully before dealing with employees. It can mean the difference
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between a disheartened and disgruntled employee and one who is encouraged to change her ways and perform at a higher level. Couch your criticism with praise and let her know exactly what she did wrong and how she can improve her performance. Focus on the performance rather than the employee.
They are not "bad" employees; they simply did something that was not correct. End the performance review on a positive note by creating a game plan to fix the issue and improve the employee's performance. Ask him how he thinks he can do his job better and provide tips that will help him succeed. Stress the fact that you want him to succeed for his own benefit, not just for the company's benefit. By creating a "problem -- solution" scenario you will lessen the blow of a bad performance review and help the employee leave the meeting chastened but not disheartened.
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32. PARAMETERS TO APPRAISE

Business Process Outsourcing (BPO) is relatively a new sector in the Indian industry, but has established itself well and is growing at a rapid rate. BPO sector offers handsome initial salary, good growth and many other benefits to its employees. Keeping in mind the attrition rates in the sector, the performance measurement and appraisal processes are of extreme importance in BPOs.
BPO employees have the advantage of getting performance based incentives. In most of the BPO organizations, there are well designed schemes for awarding the performance based incentives to the individuals and/or the teams as a whole. An incentive on the completion of the defined targets is a common practice in BPOs.The general parameters for the measurement of employees performance are: Speed i.e. process performance, Accuracy and Productivity of each process, Although the measuring parameters are different for employees at different level, but the general classification of the above mentioned parameters for Customer care Executives" and "Team leaders" are as follows:Average Call Value (the sales made or the revenue collected etc.)Time and cost per call, Average Handling Time (talk time and after call wrap up), Adherence to Schedule (availability to
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take.
33. PERFORMANCE REVIEW

Meaningful and achievable performance goals guide an employee in conducting his job. He and his supervisor ideally write performance review goals together. Joint participation in this plan encourages the employee to commit to the accomplishment of stated goals according to a schedule. Three performance levels exist for each goal: below expectations, meets expectations and exceeds expectations. An employees overall performance level determines pay raises and promotion opportunities.
A business might tailor sample performance review goals to meet company needs. Samples are available from various sources, such as Internet websites. Generally, a sample indicates a goal to accomplish and a date to accomplish it. When adapting samples, the supervisor aligns an employees goals with that of a work group and the company. For example, a company might have the goal of staying within the budget for employee training. Therefore, a supervisor might schedule an employee to attend a local seminar, instead of one that requires travel. Typically, two types of performance goals exist: employee development and business success. Employee-development goals focus on improving the value of an employee to a company. For example, an employee might
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have the goal of improving interpersonal communications. Therefore, a supervisor schedules her for an interpersonal communications class. Business-success goals focus on increasing a companys accomplishments. For example, an employee might have the goal of increasing his total sales by 10 percent to increase market share. Normally, goals include two components: what to accomplish and a time frame. When setting performance goals, a supervisor determines what to improved, maintain, avoid and eliminate. A goal might include conditions.
For example, increase the number of customer-support calls handled by 10 percent within the next six months, without decreasing the number of satisfied callers. Performance goals mutually agreed upon by the employee and supervisor increase a companys chance for success. Because performance goals set expectations, no surprises should arise during the performance review process that normally occurs annually. Established goals help a supervisor determine the resources needed by an employee to perform his duties. For example, an employee might require technology training for developing an Internet-based application. A supervisor should require that an employee submit a weekly status report. This allows the supervisor to evaluate progress and determine if an employee is on target for meeting her goals. When her success is in doubt, the supervisor might coach her in the area of concern, such as how to better schedule her time. During the performance review process, a supervisor might ask her to rate how well she did in accomplishing her goals. After the review, she and the supervisor develop a plan to improve her performance if necessary.
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34. ORGANISATION STRUCTURE & PERFORMANCE

Many small businesses wrestle with how best to organize their companies because they believe that structure is a key determinant of financial success. If a company exists to create innovative products, then the CEO sees as his duty to organize so that this potential is realized. But, many companies do not understand the link between organizational structure and performance. The issue is to organize to improve the company's ability to make decisions faster and better than competitors. This then leads to better overall company performance People Behave Like System They Are in If a CEO is unhappy with the behaviour of people within his organization, he needs to take a look at the system they are in. If people are behaving like bureaucrats, it is likely they are working in a bureaucracy. Decision making is diffuse and it is often hard to tell who has final authority. Employees can fall victim to the system they are in and not feel they have any control over their work, processes and support systems.
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The result is employees who feel disenfranchised, and not in sync with company profit and market share goals. Empowerment can be Empty Term CEO's and small business owners alike often talk about how they are "empowering" their employees to take initiative and make decisions on their own. But frequently empowering employees does not work because the systems, processes and structure these employees work in are useless to the notion of high performance. Helplessness and cynicism persist because the structure is not conducive to the employee growth and development that leads to better decision making. While important, high performance in a company is not determined solely by the best allocation of resources, though that is a popular belief. Better decision making, fostered by an organizational structure that encourages this behaviour, is equally as important. A company allocating design and engineering talent for a new product will make better new product decisions if the engineering and design staff structure is conducive to innovation. Organizing for High Performance. What works in one company to spur good decision making and high performance may not work in another. The company that values innovation may need a structure that encourages product ideas to flow easily from the design team to the CEO without getting caught in needless bureaucracy. A company noted for exemplary customer service must organize so that customers are
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always at the forefront of company decisions. Research Comes Before Structural Change If your firm aspires to exemplary customer service as one of the chief methods to ensure profits, you need to see how customers are handled now. If they are constantly switched from person to person when they call your company, you will need to develop an organization where customer service employees are trained to make almost all decisions regarding customers. Those service reps will enjoy their jobs more because they have both responsibility and authority to do their jobs. And, customers will not feel aggravated and frustrated.
35. PERFORMANCE APPRAISAL FORM

Performance appraisal form provides the basis for the performance review, providing the feedback to the employees and the final rating of the employee. It also facilitates various other HR decisions and career development plans and decisions of the employees.Therefore, performance appraisal from should be filled with utmost care and objectivity. The Performance appraisal form should be filled by the immediate supervisor or manager of the employee in order to ensure that the appraiser if fully acquainted with the performance, responsibilities, targets and standards of the employee. All the instructions and guidelines on the appraisal form should be read and followed carefully.Be prepared with all the details of the performance, the standards, job description and the past appraisals of the employee.Clear and unambiguous description of the employee performance should be given in terms of average, above average, good and excellent performance. The focus should be on the employees behavior throughout the year and not just his recent performance. Quantify the ratings, wherever possible, to ensure easy comparability. Substantiate and support your rating, and attach all the necessary
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documents (if required).Apart from the defined performance objectives and results, discuss the related issues as well covering all the aspects of the performance. When filling the appraisal form, be honest and objective.
36. PERFORMANCE APPRAISAL & ORGANISATION PERFORMANCE
Performance appraisal processes are one of the central pillars of the performance management which is directly related to the organizational performance and have a direct impact on it. Employee performance ultimately affects the organizational performance and objectives. Relationship between Appraisal and Organizational Performance According to a few HR professionals, the appraisals have no value for the organization as there is no direct relationship in performance appraisals and the organizational performance. Also, there is no strong evidence to prove that appraisals positively impact the performance of the employees. But the HR professionals who see the organizational performance as a result or sum of the employees performance, argue that apart from the direct benefits to the organization, appraisals contribute to employee satisfaction, which in turn leads to improved performance. For an organization to be effective, the goals, the standards and the action plans need to be planned well in advance. Thus, performance appraisal facilitates the achievement of organizational goals. It also facilitates the optimal use of the organizational resources. Performance appraisal is the strength of performance management, which in turn effects the
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organizational performance. It helps to identify and overcome the problems faced by the employees in their work. Performance appraisals a double edged sword Performance appraisal is like a double edged sword for an organization. Although it has many benefits for the organization, various studies have also revealed that performance appraisals have the equal probability of having a bad impact on the organizational as well as the employee performance. Where the performance appraisal improves the work performance and employee satisfaction, it can also demotivate employees and leaving a bad impression on the good employees.
Most of the employees do not approve of continuous performance monitoring and performance appraisals, and also consider it as a burdensome activity. According to Professor Kuvaas "Performance appraisals and other tools which involve feedback and target management should be adapted to the employees individual needs and characteristics. Otherwise, there is a risk of harming the good employees without being able to help the less good." Performance appraisal processes can create a sense of insecurity in the working environment and can become an obstacle in achieving the required changes in the attitudes and the performance of the employees. The element of bias in the appraisals can also worsen the situation. Therefore, performance appraisals can effect the organizational performance both positively and negatively, and should be dealt with care and expert knowledge and experience.
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37. PERFORMANCE APPRAISAL SOFTWARES
The growing size of the organizations, the competition in the labors market and the importance of the performance management and appraisals have given way to the use of performance appraisal softwares. Many companies providing the HR services and the software companies provide the performance appraisal softwares. Automate the appraisal processes and assist the HR by adding online capacities to the processes. The performance appraisal software can be customized according to the needs of the organization. The various forms and other processes can be designed in accordance to the practices being followed in the organization. The software standardizes the appraisal process. The software applications also have guidelines for the users to guide them throughout the process, alerting the users about the errors and mistakes (if any), suggesting the appropriate language to be used, provides a systematic records of the necessary documents to the rater and the HR Department. Several software packages are available which also provide the 360 degree review program so that employees can get a multi-rater feedback
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about their performance. Benefits of using Performance appraisal software. By using the performance appraisal softwares, an organization can reap the following benefits: The performance appraisal software can be implemented organization wide, covering all the employees at the levels (from lowest rank to top management) and across all the branches of the organization throughout the world. Designed with the latest technologies, they are easy to understand and make things structured, organized and standardized throughout the organisation.Performance Measures, KPI and KRAs, goals and objectives for each employee, team and department can be weighte d and listed according to their importance and priority.
Use of the standard performance appraisal softwares can help to reduce the subjectivity and the bias in the ratings of the appraisers. It facilitates the calculations and adjustments of the performance related pay and other related HR decisions. Automatic reminders can be sent to the employees and the concerned authorities for the due appraisals. It helps the HR department in appraising the performance and to manage the performance of the employees efficiently and effectively. Helps to improve the productivity of the employees and employee retention in the organisation.Keeps a detailed record of the past performances and the Performance Reviews of the employees.
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[PERFORMANCE APPRAISAL]

(MADURAI KAMRAJ UNNIVERSITY)

: MADURAI KAMRAJ UNIVERSITY

: M.B.A. IN HUMAN RESOURCE MANAGEMENT

UNDER THE GUIDENCE : PROFESSOR MR. KAMLESH MISHRA

64 66 67 81 85 87 90 91 93 94 96 98 101 103 105 107

108 110 112 113 115

Performance Management consists of Four Stages:

2. METHODS OF PERFORMANCE APPRAISALS

A point scale rate anchor define creative ability

A with E, B with C, B with D,

Poorer than Average 20%

Better than Average 20%

TRADITIONAL METHODS OF PERFORMANCE APPRAISAL

4. SIGNIFICANCE OF PERFORMANCE APPRAISAL

5. OBJECTIVE OF PERFORMANCE APPRAISAL

6. ROLE OF PERFORMANCE MANAGMENT

Illustrates this process.

Figure 1.1: The Performance Management Cycle.

7. FUNCTIONS OF EMPLOYEE PERFORMANCE

10. PERFORMANCE APPRAISAL SYSTEMS

The most common systems are:

11. PERFORMANCE EVALUATION SYSTEM

12. PERFORMANCE MANAGEMENT OUTSOURCING

13. BALANCED SCORECARD BASICS

14. HALF YERLY APPRAISAL SYSTEM

15. APPRAISAL AS EMPLOYEE MOTIVATION

16. APPRAISAL AS CAREER DEVELOPMENT

LINKING COMPENSATION TO PERFORMANCE

PERFORMANCE APPRAISAL TRAINING

19. PROCESS OF PERFORMANCE APPRAISAL

20. EMPLOYEE PERFORMANCE MANAGMENT

21. ELEMENTS IN THE APPRAISAL PROCESS.

22. DEVELOPING A GOOD APPRAISAL SYSTEMS

23. BENEFIT OF APPRAISAL

24. SETTING UP A PERFORMANCE MANAGEMENT SYSTEM

25. EVALATOR TRAINING

26. RECEVING FEEDBACK FORM SUBORDINATES

27. ADVANCEMENT & EMPLOYEE PERFORMANCE

28. POOR EMPLOYEE PERFORMANCE?

29. CAUSES FOR POOR EMPLOYEE PERFORMANCE

30. ANNUAL EMPLOYEE REVIEWS

31. BAD PERFORMANCE REVIEWS

32. PARAMETERS TO APPRAISE

33. PERFORMANCE REVIEW

34. ORGANISATION STRUCTURE & PERFORMANCE

35. PERFORMANCE APPRAISAL FORM

36. PERFORMANCE APPRAISAL & ORGANISATION PERFORMANCE

37. PERFORMANCE APPRAISAL SOFTWARES

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