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Performance

Appraisal
Performance Appraisal :

Pe rfo rm a n ce A p p ra isa l ( PA )
re fe rs to a llth o se p ro ce d u re s
th a t a re u se d to e va lu a te th e
p e rso n a lity , p e rfo rm a n ce ,
p o te n tia l, o f g ro u p m e m b e rs
What is Performance
Appraisal
Pe rfo rm a n ce a p p ra isa lis th e p ro ce ss o f o b ta in in g ,
a n a lyzin g a n d re co rd in g in fo rm a tio n a b o u t th e
re la tive w o rth o f a n e m p lo ye e . T h e fo cu s o f th e
p e rfo rm a n ce a p p ra isa lis measuring and improving
the actual performance of the employee and also the
future potential of the employee.
Assessment should not be condensed to past performance
alone. Potentials of the employee for future performance
must also be assessed.

A formal definition of performance appraisal is:


It is the systematic evaluations of the individual with
respect to his/her performance on the job and his or her
potential for development.
Objectives of Performance
Appraisal
 To review the performance of the employees over a given
period of time. 

 To judge the gap between the actual and the desired
performance.

 To help the management in exercising organizational control.

 Helps to strengthen the relationship and communication betwee


superior – subordinates and management – employees.
 

 To diagnose the strengths and weaknesses of the individuals so


as to identify the training and development needs of the futur
 

 To provide feedback to the employees regarding their past


performance.
How PA contribute to firm’s
competitive advantages

Improving
performance

Making correct
decision
Values and behavior

Competitive
advantage

Minimizing dissatisfaction Ensuring legal


And turnover competence
Process of
PA

Setting
performance
Taking standards
corrective Communicating
standards standards

Discussing
results Measuring
standards

Comparing
standards
Performance Appraisal in a
Brokerage Firm
Business Model of a
Brokerage Firm

C lie n t ( in ve sto r/ tra d e r) ca lls u p


C LIE N T h is R e la tio n sh ip M a n a g e r to
se e k a d vice o r to p la ce a n o rd e r

R e la tio n sh ip M a n a g e r a d vise s th e clie n t


R e la tio n sh ip M a n a g e r o n w h ich sh a re s to b u y a n d se ll, b u t
le a ve s th e fin a l d e cisio n to th e in ve sto r.

C lie n t ca lls d ire ctly th e D e a le r o r


D E A LE R th ro u g h R . M th e n D e a le r p la ce s th e
o rd e r o n b e h a lf o f clie n t
OPPORTUNITIES

 LACK OF AWARENESS ABOUT EQUITY MARKETS


AMONG PEOPLE

 TO CHANGE THE THE BIGGEST MYTH AMONG
PEOPLE “ INVESTING IN STOCK MARKETS IS
JUST LIKE GAMBLING”

 POTENTIAL GROWTH SEEN IN RURAL AREAS,
TIER-II AND TIER-III CITIES
OPPORTUNITIES
 There are 1,73,93,050 people in
India who invest directly into
Stock Markets out of
114,79,95,904 people living in
India.

 THAT’S JUST 1.51


%

Performance Evaluation
W h e n e ve r a C lie n t b u ys/ se lls sh a re s, B ro ke ra g e ch a rg e s
( which range from 0 . 1 % to 2 . 5 % ) charged by Firm are
th e m a in co n trib u to r to th e ir re ve n u e s
R e ve n u e
= CTC
M u ltip le
C TC
Fo r E g . A n e m p lo ye e g ive s re ve n u e w o rth 4 0 k a n d h is C TC is
2 0 k p e r m o n th th e n h is C TC M u ltip le fo r th a t m o n th w o u ld b e :
40000
= 2 times
20000
1 ) E m p lo ye e h a vin g C TC M u ltip le le ss th a n 2 tim e s o n a
co n siste n t b a sis is g ive n a n o n -p e rfo rm e r
ta g a n d m a y b e a ske d to le a ve .
2 ) First two to three months are the grace period for a
new employee.
Process of Performance
Appraisal
•Performance Appraisal is done every twelve months.

•Parameters keep changing whenever a next Performance


Appraisal is done.

•Performance Appraisal may be denied if there are


regular complaints are reported against any employee

•Seniors also play an important role in Performance


Appraisal.

•Employees have to fill Performance Appraisal Form which
includes their expectations and in future what
performance they can promise.
Case Study : Employee A

Name Period Avg CTC Multiple Appraisal


Employee A 2009-2010 2.54 20%

Employee A is working in the firm since last 3 years.



Employee A has given a Average performance of 2.54 Multiple
and has got an 20 % hike in pay

Employee A is happy and motivated with performance
appraisal.


Case Study : Employee B

Name Period Avg CTC Multiple Appraisal


Employee B 2009-2010 2.4 None

Employee B is also working in the firm since last 3 years.



Employee B has given an Average performance of 2.4 Multiple
and has not received any Appraisal as compared to Employee A
who got a 20% hike with Average Performance of marginally
higher of 2.54 multiple.

Employee B is unhappy with this irregularity in Performance
Appraisal.
Case Study : Employee C

Name Period Avg CTC Multiple Appraisal


Employee C 2009-2010 3.15 22%

Employee C is working in the firm since last 1 year.



Employee C has given an Average performance of 3.15
Multiple and has received an Appraisal of 22% as compared to
Employee A who got a 20% hike with Average Performance of
2.54 multiple.

Employee C is happy with the appraisal but concerned about
the discrimination
Case Study : Employee D

Name Period Avg CTC Multiple Appraisal


Employee D 2009-2010 2.15 None

Employee D is working in the firm since last 3 years.



Employee D has given an Average performance of 2.15
Multiple and has NOT received any Appraisal as compared to
Employee A who got a 20% hike with Average Performance of
2.54 multiple.

Employee D is dejected as he was promoted from Dealer to R.M
during this Financial Year and still hasn’t received any pay
Case Study : Employee E

Name Period Avg CTC Multiple Appraisal


Employee E 2009-2010 2.08 None

Employee E is working in the firm since last 1 year.



Employee E has given an Average performance of 2.08
Multiple and has NOT received any Appraisal as compared to
Employee A who got a 20% hike with Average Performance of
2.54 multiple.

This is a special case of Employee E where in the person
expects a pay hike as his performance has significantly
Irregularities in Performance
Appraisal
 
Performance Appraisal slabs need to be
reconsidered again.

A promotion doesn’t guarantee a Performance


Appraisal.

New Employees are recruited at a much higher cost.

Special Cases should also be considered.

All this leads to higher attrition rate in this


industry.
An Important Management Tool For The
Organization
¶Communicates organization & department
goals
¶Builds stronger working relationships
¶Improves productivity
¶Supports HR decisions: promotions, raises,
etc.
¶Assures HR decisions are based on objective
criteria
¶Identifies poor/marginal performers

[
An Important Management Tool For
The Employee
¶ Recognizes the employee’s accomplishments
¶ Helps the employee to set goals and improve
performance
¶ Employees have a chance to communicate their
career goals & ask about opportunities for
career development
¶ Employees become aware of needed
improvement
¶ Assures them that appraisals are fair
EMPLOYEES
FIRST,
C U STO M ER S SEC O N D

turning conventional management upside


down
turning conventional management upside
down

C U STO M ER S SEC O N D

E M P LO Y E E S
Thank You