ASSIGNMENT

DRIVE SPRING 2017

PROGRAM MBA
SEMESTER 4
SUBJECT CODE & NAME MU0016- PERFORMANCE MANAGEMENT AND APPRAISAL
BK ID B1868
Credit & Marks 4 CREDIT, 60 MARKS

Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.

Question. 1. Discuss the principles and dimensions of Performance

Management
Answer: Performance Management is a key process of HRM that provides basis for developing
individual and business performance. And is a part of the reward system in the most general sense.
The intention is to improve the performance of the individuals and teams. It is about getting better
results by understanding and managing performance through an agree framework of planned goals,
standards and competency requirements. Performance Management is about finding answers to
"What is to be achieved" and "How it is to be achieved". It helps find better and effective ways to
improved business results.

Concerns of Performance Management

Performance Management is concerned with

Alignment of individuals objectives with the strategic objective of the business, and creating
an environment where individuals are encouraged to uphold corporate core values and have
a belief that attainment of business objectives is beneficial to them.
Expectations are to be defined and agreed upon through role responsibilities and
accountabilities. The employees need to have a clear understanding as to what is expected of
them, what skills they should have and what they are expected to be or the kind of behaviors
they shall demonstrate at work.
Performance management shall make employee more engaged and committed, through
provision of personal goals, and helping them align them with the business, and develop
their skills and competencies.

Objectives of Performance Management

The overall objective of Performance Management is to enhance the capacity and competence of
individuals so that they exceed organizational expectation and work in a way that effectively and
efficiently attains business strategic objectives. Performance Management shall not only provide for
business development but also self-development through organizational support and guidance of
managers and leaders.

Here are a few of the objective of performance management

 Align the objectives of the individual with those of the business
Improve Organizational Performance through assessment of the current performance and
creating plans for improvement
Provide adequate resources and basis for personal development
Develop a performance culture, where people are focused on objectives, improvement,
development, where performance is properly measured and feedback is timely and
adequate, positive characteristics and behaviors are reinforced and dialogue is a constant
activity focused on development.
Inform contribution/performance pay decisions
Performance management is about getting a true balance in what is to be delivered and how
it should be delivered, where the how questions must deal with the efficiency and
effectiveness of both the business and individual. Performance management is not a just top
- down process. It is not something done to people but it is for the people.

Performance management frameworks are designed with the objective of improving both individual
and organizational performance by identifying performance requirements, providing regular
feedback and assisting the employees in their career development.

Performance management aims at building a high performance culture for both the individuals and
the teams so that they jointly take the responsibility of improving the business processes on a
continuous basis and at the same time raise the competence bar by upgrading their own skills within
a leadership framework. Its focus is on enabling goal clarity for making people do the right things in
the right time. It may be said that the main objective of a performance management system is to
achieve the capacity of the employees to the full potential in favor of both the employee and the
organization, by defining the expectations in terms of roles, responsibilities and accountabilities,
required competencies and the expected behaviors.

The main goal of performance management is to ensure that the organization as a system and its
subsystems work together in an integrated fashion for accomplishing optimum results or outcomes.

The major objectives of performance management are discussed below:

To enable the employees towards achievement of superior standards of work performance.

To help the employees in identifying the knowledge and skills required for performing the
job efficiently as this would drive their focus towards performing the right task in the right
way.
Boosting the performance of the employees by encouraging employee empowerment,
motivation and implementation of an effective reward mechanism.
Promoting a two way system of communication between the supervisors and the employees
for clarifying expectations about the roles and accountabilities, communicating the
functional and organizational goals, providing a regular and a transparent feedback for
improving employee performance and continuous coaching.
Identifying the barriers to effective performance and resolving those barriers through
constant monitoring, coaching and development interventions.
Creating a basis for several administrative decisions strategic planning, succession planning,
promotions and performance based payment.
Promoting personal growth and advancement in the career of the employees by helping
them in acquiring the desired knowledge and skills.

Some of the key concerns of a performance management system in an organization are:

 Concerned with the output (the results achieved), outcomes, processes required for reaching
the results and also the inputs (knowledge, skills and attitudes).
Concerned with measurement of results and review of progress in the achievement of set
targets.
Concerned with defining business plans in advance for shaping a successful future.
Striving for continuous improvement and continuous development by creating a learning
culture and an open system.
Concerned with establishing a culture of trust and mutual understanding that fosters free
flow of communication at all levels in matters such as clarification of expectations and
sharing of information on the core values of an organization which binds the team together.
Concerned with the provision of procedural fairness and transparency in the process of
decision making.

The performance management approach has become an indispensable tool in the hands of the
corporates as it ensures that the people uphold the corporate values and tread in the path of
accomplishment of the ultimate corporate vision and mission. It is a forward looking process as it
involves both the supervisor and also the employee in a process of joint planning and goal setting in
the beginning of the year.

Question. 2. What do you mean by feedback? Explain its Role,

Types and Principles.
Answer: Regardless of whether you are a senior executive or just starting out, everyone wants to
know how she is doing at her job. Feedback is an essential communication tool in business
performance management. One of the most effective techniques is constructive feedback, but all
feedback calls for giving and receiving information.

The performance feedback process is ongoing between managers and employees. The exchange of
information involves both performance expected and performance exhibited. According to Indiana
University Human Resources Service, Constructive feedback can praise good performance or correct
poor performance and should always be tied to the performance standards. Getting the facts, then
having a face-to-face conversation can provide direction to help solve performance problems.

Management: Feedback goes beyond managers. It extends to co-employees and even customers.
Encourage your employees to talk to management and report problems to resolve any issues. It is
easier to motivate workers in an open culture of communication than if they are afraid to speak up.

Structure: Good performance management is pro-active. Do not wait until a situation gets out of
hand before intervening. Make sure employees know that you are watching, and keep feedback
frequent. Do not leave it at news is good news unless you are sure there are not any problems.
According to Business MP, A responsible manager ought to be able to set up a schedule and provide
[employees] with constructive assistance

Confidentiality: Employees expect their leaders and managers to keep information confidential. If
you break that trust, it is difficult to build it back up and your employees will stop coming to you with
problems. Avoid gossip or delegating, and confront any issues yourself, directly with the employees
involved. If you stand by your convictions and your employees know they can trust you, they will
have more respect for you.

Timing: Often, the best time for feedback happens during day-to-day business. It is important to be
prepared for the conversation: do your homework and know the person to whom you are planning
to speak. Practice what you are going to say, and use your knowledge to predict their responses and
questions. Be sure to choose a private location and keep the conversation confidential. It is best to be
prepared, so you might want to take notes with you. Do not be afraid to act immediately in a true
emergency, but do not act too quickly if there is time to consider your response.

Successful Feedback: For feedback to have a positive outcome, it should be specific rather than
general. Generalizations might help you gather information about what the staff is feeling, but it will
not solve specific problems. It is important to focus on the behavior instead of the person and make
sure you give feedback geared to help and not hurt. You will need to limit the information you give to
what your employee can hear and process. If you overload a person, they tend to block you out just
to simplify things. Be aware of the effects of your feedback and follow up on the situation to see
what changes have been made.

Principles for Giving Feedback

Lets take a look at some other issues to consider when giving feedback to someone who works on
your team.

1. Put it in writing. Feedback is most effective when it is written down. Having it in writing increases
the chances that it will be understood. For example, Angela could simply note the dates and times
she is available and hand it to Steve. She could also write by 5 P.M. today at the top.

2. Be sensitive to peoples feelings. Some managers think they dont need to worry about the
employee becoming upset. They think that as the boss, they have the right to tell people what to do
and not worry about their feelings. This is a big mistake. Being concerned about other peoples
feelings is important in any situation. Effective managers demonstrate concern for the self-esteem of
their team members. This doesnt mean withholding criticism or ignoring problems.

3. Focus on your entire team, not just the new members. New employees are not the only ones who
need performance feedback. All employees need ongoing feedback.

Giving negative feedback: correcting poor performance

Note poor performance immediately upon observing it.

Specify what does not meet expectations.
Refer to performance standards.
Note the effect of observed performance on work group/organization.
Model or restate appropriate performance.
Describe negative consequences.
Obtain agreement on the problem.
Mutually seek solutions.
Agree on action plan.
Encourage improvement.
Set date for check (if appropriate).
Don't belabor a point.
Move forward after the discussion.
 Avoid giving correction in public.

Question. 3. Assume that you have joined as an HR in an

organization. The first task assigned to you is to conduct the
Performance Appraisal Process. What according to you is its
purpose? Describe the entire Performance Appraisal process.

Answer:

Traditional Methods:

Ranking Method: It is the oldest and simplest formal systematic method of performance appraisal in
which employee is compared with all others for the purpose of placing order of worth. The
employees are ranked from the highest to the lowest or from the best to the worst.

Paired Comparison: In this method, each employee is compared with other employees on one- on
one basis, usually based on one trait only. The rater is provided with a bunch of slips each coining
pair of names, the rater puts a tick mark against the employee whom he insiders the better of the
two. The number of times this employee is compared as better with others determines his or her
final ranking.

Grading Method: In this method, certain categories of worth are established in advance and carefully
defined. There can be three categories established for employees: outstanding, satisfactory and
unsatisfactory. There can be more than three grades. Employee performance is compared with grade
definitions. The employee is, then, allocated to the grade that best describes his or her performance.

Such type of grading is done is Semester pattern of examinations and in the selection of a candidate
in the public service sector. One of the major drawbacks of this method is that the rater may rate
most of the employees on the higher side of their performance.

Forced Distribution Method: This method was evolved by Tiffen to eliminate the central tendency of
rating most of the employees at a higher end of the scale. The method assumes that employees
performance level confirms to a normal statistical distribution i.e., 10,20,40,20 and 10 per cent. This
is useful for rating a large number of employees job performance and promo ability. It tends to
eliminate or reduce bias.

It is also highly simple to understand and easy to apply in appraising the performance of employees
in organisations. It suffer from the drawback that improve similarly, no single grade would rise in a
ratings.

Forced-Choice Method: The forced-choice method is developed by J. P. Guilford. It contains a series

of groups of statements, and rater rates how effectively a statement describes each individual being
evaluated. Common method of forced-choice method contains two statements, both positive and
negative.

Check-List Method: The basic purpose of utilizing check-list method is to ease the evaluation burden
upon the rater. In this method, a series of statements, i.e., questions with their answers in yes or
no are prepared by the HR department (see Figure 28-2). The check-list is, then, presented to the
rater to tick appropriate answers relevant to the appraisee. Each question carries a weight-age in
relationship to their importance.

Modern Methods:

Management by Objectives (MBO): An MBO programme consists of four main steps: goal setting,
performance standard, comparison, and periodic review. In goal-setting, goals are set which each
individual, s to attain. The superior and subordinate jointly establish these goals. The goals refer to
the desired outcome to be achieved by each individual employee.

In performance standards, the standards are set for the employees as per the previously arranged
time period. When the employees start performing their jobs, they come to know what is to be
done, what has been done, and what remains to be done.

Behaviourally Anchored Rating Scales (BARS): The problem of judgmental performance evaluation
inherent in the traditional methods of performance evaluation led to some organisations to go for
objective evaluation by developing a technique known as Behaviourally Anchored Rating Scales
(BARS) around 1960s. BARS are descriptions of various degrees of behaviour with regard to a
specific performance dimension.

Assessment Centres: In business field, assessment centres are mainly used for evaluating executive
or supervisory potential. By definition, an assessment centre is a central location where managers
come together to participate in well-designed simulated exercises. They are assessed by senior
managers supplemented by the psychologists and the HR specialists for 2-3 days.

360 Degree Appraisal: Yet another method used to appraise the employees performance is 360
degree appraisal. This method was first developed and formally used by General Electric Company of
USA in 1992. Then, it travelled to other countries including India. In India, companies like Reliance
Industries, Wipro Corporation, Infosys Technologies, Thermax, Thomas Cook etc., have been using
this method for appraising the performance of their employees. This feedback based method is
generally used for ascertaining training and development requirements, rather than for pay
increases.

Cost Accounting Method: This method evaluates an employees performance from the monetary
benefits the employee yields to his/her organisation. This is ascertained by establishing a relationship
between the costs involved in retaining the employee, and the benefits an organisation derives from
Him/her.

Question. 4. Discuss the skills that a line manager require for

effective Performance Management.
Answer: Often, line managers are promoted into management positions without really knowing
where to start. Theyre given the job description and are told to manage teams, finances, as well as
put strategies into play. However, without the right skills and support, the delight of a new job (and
salary) can turn into a nightmare all too quickly.

Jenny Carter, director of the new manager programme at the University of Cape Town Graduate
School of Business, says that line managers play a vital role in organisations but too often they are
left to fend for themselves without the skills or training to support them. And this is a niche that
organisations dont want to ignore. Line mangers perform functions such as scheduling, training,
hiring, firing, and writing performance evaluations. Effectively, they are the first contact point
between line workers and management, and more and more is being asked of them every year.

We have noticed a clear shift in demands being placed on line managers, she says. As
organisations flatten and move away from hierarchical structures, line managers are required to
make bigger and more responsible decisions much sooner in their careers. And for this they need an
expanded skills set.

1. Polish business communication skills

One of the most difficult things for people to do is to present ideas to people in a way that is clear,
well structured, and convincing. Another challenge is writing well-argued and accurate reports and
proposals. Unfortunately, many people dont have these skills.

2. Learn how to think strategically

In their new role, line managers can be strategic elements in the organisation, applying new business
thinking to innovating across different processes and functions, improving teams, and finding
opportunities for creating or maintaining a competitive advantage.

An important part of strategy today is in harnessing the thinking of many people, rather than any
single individual. So line managers need to create enabling environments to ensure that many
perspectives and ideas surface for the good of the organisation.

3. Get comfortable with complexity and uncertainty

Organisations never operate within a vacuum. They are a part of a greater cosmos which is made up
of many different forces. In the business world, line managers need to start grappling with the
complexity and uncertainty in emerging markets and the great interest involved in these markets.
They need to keep informed about the latest in regulations, political developments, social needs, and
they must question the role of business in these societies.

4. Improve management and leadership through personal mastery

The most profound lesson a line manager can learn, and one experienced managers should keep
reminding themselves of, is that to manage others you must first manage yourself.

In todays environment, far removed from the corporate leadership style of the past, leaders are
expected to lead by example. And leading by example hinges on one major thing: Consistency.

Everything from personal behaviour and thinking, to decision-making and relational skills, should be
driven by a keen adherence to personal values that do not shift and change in any given situation.
Leaders do not sell out on their personal values. It is these that are their compass and rudder and it
is these that determine their impact on others, encouraging and motivating them to succeed.

To understand your values, strengths and weaknesses requires concerted effort. Leadership is
cultivated, not wished into form.

5. Invest in professional development programmes

Up-skilling is critical when entering a new role in organisations. And as demands on line managers
are expected to grow and change every year, short courses are proving to be a cost-effective and
targeted means to develop the critical skills needed.

A recent Harvard Business Review study showed that offering professional development to high-
potential managers keeps them from leaving for other companies. In their article, Why top young
managers are in non-stop job hunt, Monika Hamouri, Jie Cao and Burak Koyuncu conclude that
three-quarters of high-potential employees are constantly on the look-out for opportunities
elsewhere. And a survey of 1 200 employees showed that the main grudge is not receiving enough
formal training and development. Although on-the-job training is important to these high-calibre
employees, informal employee development efforts are highly unsatisfactory to them, and they
prefer efforts that help strengthen the foundations for their future careers.

Question. 5. Define the term Ethics. Discuss the key factors

involved in ensuring Ethics in Performance Management(PM)
Answer: Performance evaluations are, by nature, somewhat subjective. This leaves employee
reviews open to potential ethical complications. Managers may intentionally or unintentionally
evaluate staffers using different criteria, which can elevate or devalue individual scores in an
unethical manner. Managers may also fail to take their personal feelings into account when issuing
performance judgment, which can bias their assessment, take the focus away from the professional
elements of an evaluation, and skew the results.

Use Uniform Evaluation Criteria: Eliminate some of the potential for ethical missteps in performance
evaluations by using the same standard evaluation criteria for all employees. Using different scoring
matrices can be unethical because you're judging people on different scales. Develop individual,
objective goals and measurements in advance of reviews so you can better gauge performance in an
unbiased manner. Develop standardized assessment forms and consider using a numerical scoring
system to help even the playing field among employees.

Remove Personal Prejudice: Everyone has personal prejudices, although some are more pronounced
than others. The first step in eliminating personal feelings from what should be an unbiased process
is to acknowledge them. Otherwise, you may unintentionally tap into these feelings when conducting
performance evaluations. This unethical approach allows personal issues and preconceived notions
to impact staffers in an unfair manner. For example, if you know you tend to be harder on up-and-
coming professionals who remind you of yourself, this constitutes a personal prejudice. Evaluating a
staffer based on how you see yourself rather than on his performance is not ethical.

Eliminate the Friendship Factor: It can be difficult to be objective about employees you consider
personal friends, but letting friendships overshadow professional responsibilities is unethical. You
may view friends in a better light than reality presents, or feel you have a better understanding about
their deficiencies. This can make you justify and defend poor performance in a way you might not
necessarily do for an employee you don't know as well, which is unethical and unfair to all staffers. It
creates a non-objective review that can shortchange the employee you favor, as he isn't given
constructive criticism that will help him improve his professional performance in the future.

Defer Evaluations: If you don't feel you can be objective in a performance evaluation, the ethical
thing to do is defer the task to another manager or superior. This is especially important if you have a
dislike for a staffer, have a history of conflict or are otherwise prejudiced against that person and
unable to evaluate her in an ethical and unbiased manner. If you cant conduct a fair and accurate
performance evaluation, that staffer may file a complaint or otherwise challenge your evaluation.
This can call the ethics of your entire organization into question.

Question. 6. Write short notes on the following:

a) MBO
Answer: Management by Objectives (MBO): An MBO programme consists of four main steps: goal
setting, performance standard, comparison, and periodic review. In goal-setting, goals are set which
each individual, s to attain. The superior and subordinate jointly establish these goals. The goals refer
to the desired outcome to be achieved by each individual employee.

In performance standards, the standards are set for the employees as per the previously arranged
time period. When the employees start performing their jobs, they come to know what is to be
done, what has been done, and what remains to be done.

It means management by objectives and the performance is rated against the achievement of
objectives stated by the management. MBO process goes as under.

Establish goals and desired outcomes for each subordinate

Setting performance standards
Comparison of actual goals with goals attained by the employee
Establish new goals and new strategies for goals not achieved in previous year.

Advantage It is more useful for managerial positions.

Disadvantages Not applicable to all jobs, allocation of merit pay may result in setting short-term
goals rather than important and long-term goals etc.

b) Behaviorally Anchored Rating Scales Method (BARS)

Answer: Behaviourally Anchored Rating Scales (BARS): The problem of judgmental performance
evaluation inherent in the traditional methods of performance evaluation led to some organisations
to go for objective evaluation by developing a technique known as Behaviourally Anchored Rating
Scales (BARS) around 1960s. BARS are descriptions of various degrees of behaviour with regard to a
specific performance dimension.

BARS can be developed using data collected through the critical incident technique,[5] or through
the use of comprehensive data about the tasks performed by a job incumbent, such as might be
collected through a task analysis. In order to construct BARS, several basic steps, outlined below, are
followed.

Examples of effective and ineffective behavior related to job are collected from people with
knowledge of job using the critical incident technique. Alternatively, data may be collected
through the careful examination of data from a recent task analysis.
These data are then converted into performance dimensions. To convert these data into
performance dimensions, examples of behavior (such as critical incidents) are sorted into
homogeneous groups using the Q-sort technique. Definitions for each group of behaviors are
then written to define each grouping of behaviors as a performance dimension
A group of subject matter experts (SMEs) are asked to re-translate the behavioral examples
back into their respective performance dimensions. At this stage the behaviors for which
there is not a high level of agreement (often 5075%) are discarded while the behaviors
which were re-translated back into their respective performance dimensions with a high
level of SME agreement are retained. The re-translation process helps to ensure that
behaviors are readily identifiable with their respective performance dimensions.
The retained behaviors are then scaled by having SMEs rate the effectiveness of each
behavior. These ratings are usually done on a 5- to 9-point Likert-type scale.
Behaviors with a low standard deviation (for examples, less than 1.50) are retained while
behaviors with a higher standard deviation are discarded. This step helps to ensure SME
agreement about the rating of each behavior.
Finally, behaviors for each performance dimensions, all meeting re-translation and criteria,
will be used as scale anchors.