ON
VILL. KUNJHAL P.O JHARMAJRI THE BADDI DISTT
SOLAN (HP)
INDEX
SR.NO
TOPIC
PERFACE,AKNOWLAGDEMENT
1.
COMPONY PROFILE, VISION,MISSION,
1.
MEASURING PERFORMANCE V/S ACTION
2.
PERFORMANCE APPRAISAL
3.
OBJECTIVES OF PERFORMANCE APPRAISAL
4.
PERFORMANCE APPRAISAL AND COMPETITIVE
ADVANTAGE
5.
APPRAISAL PROCESS
6.
METHODS OF APPRAISAL
7.
MANAGEMENT BY BJECTIVES(MBO)
8.
LARSEN AND TOUBRO, HUMAN RESOURCE
DEVELOPMENT—
PERFORMANCE APPRAISAL SYSTEM
9.
10.
ASSESSMENT CENTRES
360-DEGREE FEEDBACK
11.
APPRAISE THE PERFORMANCE
12.
PERFORMANCE INTERVIEW
13.
GUIDELINES FOR EFFECTIVE APPRAISAL
INTERVIEW
14.
USE OF APPRAISAL DATA
EDWARD DEMING ON PERFORMANCE
APPRAISAL
15.
16.
CHALLENGES OF PERFORMANCE APPRAISAL
17.
PIRAMYD MEGASTORE - STORY OUTLINE
18.
HR VISION OF PIRAMYD MEGASTORE
19.
PERFORMANCE APPRAISAL METHODS USED AT
PIRAMYD
Preface
An Industrial, Business or service organization by taking up a
project study is most important part of our M.B.A course & is must
as per the syllabus prescribed by KURUKSHTRA UNIVERSITY.
Our MBA course is of administrative and managerial activity of
industrial, Business or service organization. The main objective of
this to identify the recent performance appraisal system in the
companies and evaluate the actual performance appraisal
programme.
ACKNOWLEDGEMENT
Every piece of hard work requires the combined efforts and
talents of many people. An ambitious work of this kind,
providing analytical review to the subject would have
remained a concept rather than the finished product without
cooperation of those who respondent to our request to
contribute. However, I alone is responsible for any
shortcomings remained in this report. I shall be thankful to
Mr. Hans Raj Guleria Asstt. Mgr. (HR) who co-operate
me during my training time and also give special regard to
Mr. S.V.R. Murthy DGM (commc.& Admin) who give
me good support during my training time. I am also
thanking to Mr. Surinder Singh HR Asstt. He help me to
preparing my project and also help me in my training
period. I heartly thankful to all them for their valuable
support.
Submitted To:Mr. Hans Raj Guleria
Asstt. manager
Submitted By:Yogita
MBA 2nd Sam
CRESCENT THERAPEUTICS LIMITED OVERVIEW
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Started in Dec 2003
2006 Complete Coverage of Northern India (By end December)
2007 To enter the Pharmaceutical Market of Nepal (April 2007)
2007 To Commence Production at the new US FDAApprovable
manufacturing Facility At Baddi, Himachal Pradesh, India
The company’s strategic focus right from inception has been
the Neuro-Psychiatric Market in India. Currently operating in
South, West and East zones of India, Crescent would be
covering the entire Indian subcontinent with its entry into
Northern India being slated for Dec. 2006. While the current
focus of the company is to become one of the leading players in
Neuropsychiatry segment of the Indian Pharmaceutical Industry,
Crescent has definite plans to carve out its due share in the
rapidly growing contract manufacturing service industry and
enter international generic and branded-generic Limited is on
the threshold of crossing the coveted Rs 200 million-mark by
March 2007. Here are some of the important milestones:
markets in the foreseeable future.The major strength of
Crescent is its competent team of industry professionals, highly
proficient in brand building, selling and distribution in Indian
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1999 Complete coverage of South India
2001 Complete coverage of Eastern India Therapeutics Limited
is on the threshold of crossing the
2003 Complete coverage of Western India
Pharmaceutical Industry. The company is also in the
process of putting together a strong team of professionals
with proven success expertise in all technical areas like
manufacturing, quality assurance and formulation
development.
Started in Dec
ember 1997 with a sale of
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2006 Complete Coverage of Northern India (By end
December)
2007 To enter the Pharmaceutical Market of Nepal (April
2007)
2007 To Commence Production at the new US FDAApprovable
manufacturing Facility At Baddi, Himachal Pradesh, India
The company ’s strategic focus right from inception has been
the Neuropsychiatric Market in India. Currently operating in
South, West and East zones of India,Crescent would be
covering the entire Indian sub-continent with its entry into
Northern India being slated for December 2006. While the
current focus of the company is to become one of the leading
players in Neuropsychiatry segment of the Indian
Pharmaceutical Industry, Crescent has definite plans to carve
out its due share in the rapidly growing contract manufacturing
service industry and enter international generic and brandedgeneric markets in the foreseeable future. The major strength of
Crescent is its competent team of industry professionals, highly
proficient in brand building,
VISION :To make a difference to the quality of life for the majority of
people by making good quality pharmaceuticals affordable
the
MISSION:To become one of the best loved pharmaceutical companies in India
by achieving a leading position in the focused therapeutic segments
by:
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Providing exceptional service to all our customers and stake
holders
Building a team of professionals with distinctive competencies
Creating and nurturing a high-performance culture
Pursuing world-class standards in our People, Performance,
Processes and Partnerships
Practicing the Managing as the Trustees of
employees,customers and stakeholders
Strategies:
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expansion to 300 million tablets for month
Dedicated service floor
Supported by complete utility equipment
Zero discharge unit
Entire Process and Quality Assurance Area are Epoxy-coated
Full-fledged Quality Assurance Department with sophisticated
equipment
100 per cent compliance to cGMP and cGLP
A competent team of highly qualified technical professionals with rich
industry experience and expertise, who have hands-on experience,
will manage the manufacturing at Crescent envisages achieving:
1. The leadership position in the neuropsychiatry segment by
becoming a strong #3 company in the medium term
2. The position of a strategic partner of choice in the contract
manufacturing space in the medium-term
3. The position of a strategic partner of choice in the contract
research space in the long-term
4. A niche as an international generic company in the long-term
Manufacturing and Technology
Crescent is setting up a state-of-the-art manufacturing facility
for Oral Solids Dosage Forms that is US FDA-approvable at Baddi in
Himachal Pradesh and is expected to commence production by
November 2006.
State of the art manufacturing facility conforming to the International
Regulatory standards.
Installed capacity of 200 million tablets per month with a provision for
expansion to 300 million tablets for month
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Dedicated service floor
Supported by complete utility equipment
Zero discharge unit
Entire Process and Quality Assurance Area are Epoxy-coated
Full-fledged Quality Assurance Department with sophisticated
equipment
100 per cent compliance to CGMP and CGLP
A competent team of highly qualified technical professionals
with rich industry experience and expertise, who have hands-on
experience, will manage the manufacturing at Crescent
Full-fledged Quality Assurance Department with sophisticated
equipment
100 per cent compliance to CGMP and CGLP
MEASURING PERFORMANCE V/S ACTION
Come appraisal time and one of the most debated aspects of completing the fair-andsquare appraisal revolves around what is 'measured' and what is 'achieved'. And the fable
of the Bees and the Bee Keepers is a very popular paradigm that often gets quoted at such
times. It goes thus:
The Story: Once upon a time there were two beekeepers that each had a beehive.
The beekeepers worked for a company called Bees, Inc. The company's customers loved
its honey and demand for the product was increasing. So Bees, Inc. assigned each
beekeeper a goal for increased honey production. The beekeepers had different ideas
about how to meet their goal and designed different approaches to improve the
performance of their hives.
The first beekeeper established a bee performance management approach that
measured the number of flowers each bee visited. At considerable cost to the beekeeper,
an extensive measurement system was created to count the flowers each bee visited. He
also provided feedback to each bee at mid-season on his individual performance. He also
created special awards for the bees who visited the most number of flowers. However, the
bees were never told about the hive's goal to produce more honey so that the company
could increase honey sales. The second beekeeper also established a bee performance
management approach but this approach communicated to each bee the goal of the hive
for increased honey production. The beekeeper and his bees measured two aspects of
their performance the amount of nectar each bee brought back to the hive and the amount
of honey the hive produced. The performance of each bee and the hive's overall
performance were charted and posted on the hive's bulletin board for all the bees to see.
The beekeeper created a few awards for the bees that gathered the most nectar. But he
also established a hive incentive program that rewarded each bee in the hive based on the
hive's overall honey production the more honey produced, the more recognition each bee
would receive.
At the end of the season, the beekeepers evaluated their approaches. The first
beekeeper found that his hive had indeed increased the number of flowers visited ,but the
amount of honey produced by the hive had dropped. The Queen Bee reported that
because the bees were so busy trying to visit as many flowers as possible, they limited the
amount of nectar they would carry so they could fly faster. Also, since only the top
performers would be recognized, the bees felt they were competing against each other for
awards. As a result, they would not share valuable information with each other that could
have helped improve the performance of all the bees (like the location of the flower filled
fields they'd spotted on the way back to the hive). As the beekeeper handed out the
awards to individual bees, unhappy buzzing was heard in the background. After all was
said and done, one of the high performing bees told the beekeeper that if he had known
that the real goal was to make more honey, he would have worked totally differently. The
second beekeeper, however, had very different results. Because each bee in his hive was
focused on the hive's goal of producing more honey. This Bess had concentrated their
efforts on gathering more nectar in order to produce more honey than ever before. The
bees worked together to determine the highest nectar yielding flowers and to create
quicker processes for depositing the nectar they had gathered. They also worked together
to help increase the amount of nectar gathered by the poorer performers. Tile Queen Bee
of this hive reported that the poor performers either improved their performance or
transferred to hive No.1, because the hive had reached its goal. The beekeeper rewarded
each bee his portion of the hive incentive. The keeper was also surprised to hear a loud,
happy buzz and a jubilant flapping of wings as he rewarded the individual highperforming bees with special recognition.
Should you measure performance or mere activities of employees? is the one who
does silent work but does not show of himself/herself or the one who puts up a show but
hardly performs to be recognized and rewarded? This and other related questions are
answered in this chapter.
PERFORMANCE APPRAISAL
An organization’s goals can be achieved only when people put in their best efforts. How
to ascertain whether an employee has shown his or her best performance on a given job?
The answer is performance appraisal. Employee assessment is one of the fundamental
jobs of HRM. But not an easy one though. This chapter is devoted to a detailed
discussion of the nature and process of conducting performance appraisal.
Meaning and Definition
In simple terms, performance appraisal may be understood as the assessment of an
individual's performance in a systematic way, the performance being measured against
such factors as job knowledge, quality and quantity of output, initiative, leadership
abilities, supervision, dependability, co-operation, judgement, versatility, health, and the
like. Assessment should not be confined 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 evaluation of the individual with respect to his or her performance on
the job and his or her potential for development.
A more comprehensive definition is:
Performance' appraisal is a formal structured system of measuring and evaluating an
employee’s job related behaviors and outcomes to discover how and why the employee is
presently performing on the job and how the employee can perform more effectively in
the future so that the employee organization and society all benefit.
The second definition includes employees’ behaviour as part of the assessment.
Behaviour can be active or passive--do something or do nothing. Either way behaviour
affects job results. The other terms used for performance appraisal arc: performance
rating, employee assessment. Employees performance review, personnel appraisal,
performance evaluation employee evaluation and (perhaps the oldest of the terms used)
merit rating. In a formal sense, employee assessment is as old as, the concept of
management and in an informal sense; it is probably as old as mankind. Nor performance
appraisal is done in isolation. It is linked to job analysis as shown in Fig.
Performance
Standards
Job Analysis
Describes
work
personnel requirement
of a particular job
and
Translate job requirements I
into levels of acceptable or
I' unacceptable performance
Performance
Appraisal
Describes the job-relevant
strengths and weaknesses of
each individual
Fig. Relationship of Performance Appraisal and Job Analysis
Job analysis sets out requirements, which are translated into performance standards,
which in turn from the basis for performance appraisal.
OBJECTIVES OF PERFORMANCE APPRAISAL
Data relating to performance assessment of employees arc recorded, stored. and
used for seven purposes. The main purposes of employee assessment are:
1. To effect promotions based on competence and performance.
2. To confirm the services of probationary employees upon their completing the
probationary period
satisfactorily.
3. To assess the training and development needs of employees.
4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales
have not been fixed.
5. To let the employees know where they stand insofar as their performance is concerned
and to assist them with constructive criticism and guidance for the purpose of their
development.
6. To improve communication. Performance appraisal provides a format for dialogue
between the superior and the subordinate, and improves understanding of personal goals
and concerns. This can also have the effect of increasing the trust between the rater and
the ratee.
7. Finally, performance appraisal can be used to determine whether HR programmes such
a selection, training, and transfers have been effective or not.
Broadly, performance appraisal serves four objectives(i)
developmental uses,
(ii)
administrative uses/decisions,
(iii)
organizational maintenance/objectives, and
(iv)
documentation purposes
Table below outlines these and specific uses more clearly:-
Multiple Purposes of Performance Assessment
General Applications
Specific Purpose
Developmental Uses
Identification of individual needs
Performance feedback
Determining transfers and job assignments
Identification of individual strengths ad
development needs
Salary
Promotion
Administrative Uses/Decisions
Retention or termination
Recognition of individual performance
Lay-offs
Identification of poor performers
Organizational Maintenance/ Objectives
Documentation
HR planning
Determining organization training needs
Evaluation of organizational goal
achievement
Information for goal identification
Evaluation of HR systems
Reinforcement of organizational
development needs
Criteria for validation research
Documentation for HR decisions
Helping to meet legal requirements
PERFORMANCE APPRAISAL AND COMPETITIVE
ADVANTAGE
The objectives of performance appraisal, listed above, point out the purpose which
such an exercise seeks to meet. What needs emphasis is that performance evaluation
contributes to firm's competitive strength. Besides encouraging high levels of
performance, the evaluation system helps identify employees with potential, reward
performance equitably and determine employee's need for training. Specifically,
performance appraisal helps an organization gain competitive edge in the following ways
(see Fig below)
Strategy and
Behavior
Improving
Performance
Making correct
decisions
Competitive
Advantage
Values and
Behaviour
Minimizing
dissatisfaction and
turnover
Ensuring Legal
Compliance
Fig: How Performance Appraisal can contribute to Firm's Competitive Advantage?
Improving Performance
An effective appraisal system can contribute to competitive advantage by improving
employee job performance in two ways-by directing employee behaviour towards
organizational goals, as was done by the second beekeeper (see opening case), and by
monitoring that behaviour to ensure that the goals are met.
Making Correct Decisions
As stated above, appraisal is a critical input in making decisions on such issues as pay
raise, promotion, transfer, training, discharges and completion of probationary periods.
Right decision on each of these can contribute to competitive strength of an organization.
If promotion, for example, is made on performance, the promotee feels motivated to
enhance his or her performance.
Ensuring Legal Compliance
Promotions made on factors other than performance might land up a firm in a legal
battle, thus diverting its focus on non-productive areas, as it happened to Williamson
Magar. Organizations can minimize costly performance-related litigation by using
appraisal systems that give fair and accurate ratings.
Minimizing Job Dissatisfaction and Turnover
Employees tend to become emotional and frustrated if they perceive that the ratings
they get are unfair and inaccurate. Such employees find that the efforts they had put in
became futile and obviously get de-motivated.
Dissatisfaction in the job sets in and one of the outcomes of job dissatisfaction is
increased turnover. Fair and accurate appraisal results in high motivation and increased
job satisfaction. An organization having satisfied and motivated employees will have an
edge over its competitors.
Consistency between Organizational Strategy and Behaviour
An organization needs a strategy consistent with the behaviour of its employees if it
were to realize its goals. A truism of organizational life is that people engage themselves
in behaviours that they perceive will be rewarded. As employees want to be rewarded,
they tend to occupy themselves more with those activities on which the organization
emphasizes. For example, if the focus is on service, employees will behave in ways that
will help them in gaining rewards associated with service delivery. If the focus is on cost
control, employees will seek to control cost and thus be recongnised and rewarded. If the
focus is on rewarding productivity, employees will strive for productivity. The
performance appraisal becomes not only a means of knowing if the employees' behaviour
is consistent with the overall strategic focus, but also a way of bringing to the fore any
negative consequence of the strategy- behaviour fit For example, a single point
productivity focus may include potential negative consequences such as decreased quality
and co-operations. Thus, the performance appraisal system is an important organizational
mechanism to elicit feedback on the consistency of the strategy-behaviour link.
Organizational Strategy and Performance Appraisal
The performance appraisal system serves many organizational objectives and goals.
Besides encouraging high level of performance, the evaluation system is useful in
identifying employees with potential, rewarding performance equitably. And determining
employees' needs for development. These are all the activities that should support the
organization’s strategic orientation. Although these activities are clearly instrumental in
achieving corporate plans and long-term growth, typical appraisal systems in most
organizations have been focused on short-term goals.
From the strategic management point of view, organizations can be grouped into three
categories defenders, prospectors and analyzers. Performance appraisal has definite roles
in all the three strategies.
Typically, defenders have a narrow and relatively stable product-market domain.
Because of this narrow focus, these organizations seldom need to make major
adjustments in their technology. Structure or methods of operations. They devote primary
attention to improving the efficiency of their existing operations. Because of the
emphasis 011building skills within the organization, successful defenders use
performance appraisal for identifying training needs. Performance appraisal is usually
more behaviour oriented.
Organizations with a prospector strategy continuously search for different product and
market opportunities. In addition, these organizations regularly experiment with potential
responses to new and emerging environmental trends. Prospectors are often the
harbingers of change. Because of the emphasis on skills identification and acquisition of
human resources from external sources, as opposed to skills building with the
organization, prospectors often use the performance appraisal as a means of identifying
staffing needs. The emphasis is on results. Finally, the focus is on division and corporate
performance evaluation as they compare with other companies during the same
evaluation period.
Organizations with an analyzer strategy operate in two types of product-.market
domains. One domain is stable while the other is changing. In their more innovative areas,
managers watch their competitors closely and rapidly adopt the ideas that appear
promising. In general, analyzers use cost effective technologies for stable products and
project or matrix technologies for new product. Analyzers tend to emphasize both skill
building and skill i1cquisilion and employ extensive training programmes.
Thus, these organizations attempt to identify both training as well as staffing needs. The
appraisal systems are considered at the individual, group and divisional levels. Finally,
successful analyzers have a tendency to examine current performance with past
performance within the organization. Cross-sectional comparisons (comparisons among
'companies) may also occur.
Whatever the category, a performance appraisal system has strategic importance to a
firm in three ways:
1. Feedback mechanism,
2. Consistency between organizational strategy and job behaviour, and
3. Consistency between organizational values and job behaviour.
APPRAISAL PROCESS
Figure below outlines the performance- appraisal process. Each step in the process is
crucial and is arranged logically. The process as shown in Fig. Below is somewhat
idea1ised. Many organizations make every effort to approximate the ideal process,
resulting in first-rate appraisal systems. Unfortunately, many others fail to consider one
or more of the steps and, therefore, have less-effective appraisal system.
Objectives of
Appraisal
Establish job
Expectation
Design an appraisal
performance
Performance
interview
Use appraisal data for
appropriate purposes
1. Objectives of Appraisal
Objectives of appraisal as stated above include effecting promotions and transfers,
assessing training needs, awarding pay increases, and the like. The emphasis in all these
is to correct problems. Theses objectives are appropriate as long as the approach in
appraisal is individual. Appraisal in future, would assume systems orientations. In the
systems approach, the objectives of appraisal stretch beyond the traditional ones.
In the systems approach, appraisal aims at improving the performance, instead of
merely assessing it. Towards this end, an appraisal system seeks to evaluate opportunity
factors.
PERFORMANCE APPRAISAL SYSTEMS
Guiding value
Primary roles
Traditional
Attribution to individual
Control, documentation
Leadership practices
Appraisal frequency
Degree of formality
Reward practices
Directional, evaluative
Occasional
High
Individual orientation
Systems
Attribution to systems
Development, problem
solving
Facilitative, coaching
Frequent
Low
Group orientation
2. Establish Job Expectations
The second step in the appraisal process is to establish job expectations. This includes
informing the employee what is expected of him or her on the job. Normally, a discussion
is held with his or her superior to review the major duties contained in the job place of
formal performance evaluation.
3. Design Appraisal Programme
Designing an appraisal programme poses several questions which we need to answers.
They are: -
1. Formals versus informal appraisal
2. Whose performance is to be assessed?
3. Who are the raters?
4. What problems are encountered?
5. How to solve the problems?
6. What should be evaluated?
7. When to evaluate?
8. What methods of appraisal are to be used?
What
methods?
Formal
V/s
Whose
performance
Informal
Appraisal
design
When to
evaluate?
What to
evaluate?
What are the
raters?
What
problems
How to solve?
1. Whose performance should be rated?
To the question as to whose
performance should be rated, the answer is obvious—employees, is it individual
or teams? Specifically the rate may be defined as the individual, work group,
division, or organizations. It is also possible to define the rate at multiple levels.
For example, under some condition, it may be desirable to appraise performance
both at work-group level for merit-pay increases and at the individual level to
assess training needs. Two conditions necessitate a group level appraisal—group
cohesiveness and difficulty in identifying individual performance. Description.
Individual should not be expected to begin the job until they understand what is
expected out of them.
2. Formal V/s informal appraisal: - the first step in designing an appraisal
programme is to decide whether the appraisal should be formal or informal.
Formal appraisal usually occurs at specified time periods—once or twice year.
Formal appraisals are most often required by the organizations for the purposes
of employee evaluation. Informal performance appraisal can occur whenever the
superior feels the need for communication. For example, if the employee has
been consistently meeting or executing standards, an informal appraisal may be
in order to simply recognize this fact. Discussions can take place anywhere in the
organizations, ranging from the managers office to the canteen. But care needs to
be taken to ensure that the discussion is held in private. Many organizations
encourage a mixture of both formal and informal appraisal. The formal appraisal
is most often used as primary evaluation. However, the informal appraisal is very
helpful for more performance feedback. Informal appraisal should not take the
Group cohesiveness refers to shared feeling among work-team members. There is
cooperation and clear
understanding to
accomplish
tasks which are
interdependent. Any attempt to assess individual performance shall undermine
group cohesiveness and tend to promote individualistic or even competitive
orientation. The difficulty in identifying individual contribution is also important
to consider. In some cases, interdependent of tasks is so complete that it is
difficult to identify who has contributed what. There is no other choice but to
3. Who are Raters? Raters can be immediate supervisors, specialist from the HR
department, subordinates. Peers, committees, clients, self appraisal, or a
combination of several.
a. Immediate supervisor is the fit candidate to appraise the performance of
his or her subordinate. There are 3 reasons in support of this choice. No
one is familiar with the subordinate’s performance than his or her superior.
Another reason is that the superior has the responsibility of managing a
particular unit. When the tasks of evaluating a subordinate is given to
another person, the superior authority may be undermined seriously.
Finally, training and development of subordinate is am portent element in
every mangers job. Since appraisal programme are often clearly linked to
training and development, the immediate superior may be the legal choice
to conduct the performance evaluation.
b. Subordinate can assess the performance of their superiors. The use of this
choice may be useful in assessing an employee ability to communicate,
delegate work, allocate resources, disseminate information, resolve intrapersonal conflict, and deal with employees on a fair basis. But the
problem with the subordinate evaluation is that supervisors tend to
become popular, not by effective leadership, but by mere gimmicks.
c. Peers are in better position to evaluate certain facts of job performance
which the subordinates or supervisors cannot do. Such facts include
contribution skills, reliability and initiative. Closeness of the working
relationships and the amount of personal contacts place peers in a better
position to make accurate assessments. Unfortunately friendship or
animosity may result in distortion of evaluation. Further when reward
allocation is based on peer evaluation, series conflicts among co-workers
may develop. Finally join together to rate each other high.
d. Although clients are seldom used for rating employee performance,
nothing prevents an organization from using this source. Clients may be
members within the organization who have direct contact with the rate
and make use of an output (goods or services) this employee provides.
Interest, courtesy, dependability and innovativeness are but a few of the
qualities for which clients can offer rating information. Clients, external
to the organization can also offer similar kinds of information. Where
appraisal is made by the superior, peers, subordinates and clients, it is
called the 360-degree system of appraisal. First developed at General
Electric, US in 1992 the system has become popular in our country too.
GE (India). Reliance Industries, Crompton Greaves, Godrej Soaps, Wipro,
Infosys, Thermax and Thomas Cook are using the method with greater
benefits. The Arthur Anderson Survey 1997 reveals that 20% of the
organization use 360 degree method. In the 360 degree method, besides
assessing performance. Other attributes of the assess—talents, behavioral
quirks, values, ethical standards, tempers and loyalty are evaluated by the
people who are best placed to do it. Many employees use rating
committees to evaluate employees. These committees are often composed
of the employee’s immediate supervisor and three or four other
supervisors who come in contact with the employee. This choice is
welcome when an employee in the course of his or her job performs a
variety of tasks in different environment. For e.g. 1supervisor may work
with the employee when technical aspects of a job are being performed
and another supervisor may deal with the same employee in situations
where communications skills are crucial. There are several benefits in
using multiple raters. First there may be objectivity in rating as more than
rater is involved in the assessment. Furthermore where there are
differences in the rater ought ratings they usually stem from the fact that
raters at different level in the organization often observe different facets
of an employee performance-the appraisal to reflect these differences.
The disadvantages of committee rating are that it diminishes the role of
the immediate supervisor in the area of training and development.
e. In self –appraisal employee himself or herself evaluates his or her own
performance. Indian Telephone Industries has been following the selfappraisal system for executives in grade I to IV. Hewlett-Packard and
Texas Instruments too ask their performance to prepare their own
appraisal. On the positive side it may be stated that in self-appraisal there
is an opportunity to participate in evaluation particularly if it is combine
with goal setti9ng and this should be improve the mangers motivation.
Managers are less defensive in self-evaluation than when supervisors tell
them what they are. Self-appraisal is best suited where executive
development is the main purpose of evaluation as the approach enablers’
managers to clearly assess their areas of differences. Unfortunately selfappraisal falls short almost by any criterion. They tend to be more lenient
compared to other sources of evaluation, even that of peers who are more
lenient than their superiors. Self-appraisal is also more likely to be less
biased and less in agreement with judgment of others. In practice a
combination of methods is followed for employee. For example
evaluation by self may be followed by a superior, the personal department
or the HR department (following diagram).
Different Raters of Performance- L&T, Bangalore works
PROCEDURE AND SCHEDULE FOR PERFORMANCE APPRAISL PROCESS
Action by/Date
Form/Section
Brief description of Activities
Annual Performance Review
Form 2
Sec:
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Describes actual results against
objectives set earlier. Not more than
five
Carries out self-review highlighting
significant contributions and factors
influencing performance
Keeps himself or herself ready for
appraisal interview by analyzing his
performance, strengths and weakness
and development needs.
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Employee by
15.4.1999

Form 2
Sec: B, C


From 3
From 1


From 2

Sec C
Sec D

Prepares for the appraisal interview by
analyzing results against objectives,
strengths and weakness and recalling
significant incidents. Related to critical
attributes.
Discusses with the employees and
provides feedback on critical attributes
and rate on performance and attributes.
Carries out development planning with
the employee
Carries out performance planning for
1994-1995 with employee, selects and
describes role related attributes.
Describes strengths and weakness and
comments on potential areas for growth
Records training needs and apecific
developments plans.

From 2
Sec E


Next superior(s)
By 15.6.1994
Comments on specific developments
plans
Makes overall observations on the
employee’s performance
Forwards the forms if necessary to his
superior to ensure:
1. Covenants are reviewed by a superiors
at least at DGM level
2. Superiors/ executives are reviewed by
covenanted officers.
Immediate
superior(s)
By 15.6.1994
From 2


From 2
Personnel/
HRD dept.
By 15.7.1994
HRD dept.
By 30.7.1994


From 2



Immediate
Superior
Notes the comments by the next
superiors and conveys significant
observations to employee
Forwards for convents to HRD depts.
and for superiors/executives to
concerned Personnel Dept.
Analyses rating and comments and
furnishes data to all concerned for
necessary actions
Co-ordinates Development Action
Proposals at Respective Group/ unit
level
Plans training programme and other
actions
Complies Pa data for aggregate
analysis
Comments on Pa exercise and send
report to GMs and corporate
management
From 1


From 3
Reviews performance and objectives
and writes comments as necessary
Reviews development action taken
and records status.
2. PERIODIC REVIEW (during the year)
Whoever may be the rater two requisites must be fulfilled. First the rater must be free
from bias. Second the rater must have an opportunity to observe the full spectrum of
activities and behavior of the rate over an extended time period.]
4. Problems of Rating: - Performance appraisals are subject to a wide variety of
inaccurate and biases referred to as rating errors. These errors occur in the rater’s
observations, judgments and information processing and can seriously affect assessment
result. The most common rating errors are leniency or severity, central tendency, halo
effect, primary and recency effects, perceptual set, performance dimension behavior, spill
over effect and status effect.
WC according to a
Severe rater
LOW
WC according to a lenient rater
True amount WC
written communication
Skills (WC)
HIGH
4. Central tendency: - this occurs when employees are incorrectly rated near the
average or middle of the scale. The attitude of the rate is to play safe. This safeplaying attitude stems from certain doubts and anxieties which the raters have
while assessing the ratees. Such doubts and anxieties are :
Obviously it’s become difficult to distinguish between excellent performance and poor
performance. In small organization it is common to label all employees as an average.
But in large companies errors of this type tend to obviate the value of evaluations.
Halo Error - it takes place when one aspect of an individual performance influences the
evaluation of the entire performance of the individual just as the assessment of the
performance of a student in his or her examination being influence by the opening
paragraph of every answer. If the introductory paragraph is poorly written the chances of
scoring high marks in that answer are diminished however good the subsequent portion
of the essay may be
Rater effect: this includes favoritism, stereotyping and hostility. Excessively high or low
scores are given only to certain individual or groups based on the rater’s attitude towards
the rate, not on actual outcomes or behavior. Sex, age, race and friendship biases are
example of this type of error.
Primary and recency effects: - the rater’s ratings are heavily influenced either by
behavior exhibited by the rate during the early stage of the review period or by outcomes
or behavior exhibited by the rate near the end of the review period (recency). For
example if a salesperson captures an important contract/ sales just before the completion
of the appraisal the timing of the incident may inflate his or her standing even though the
overall performance of the salesperson may not have been encouraging. Likewise a
blunder committed just before the appraisal period may diminish chance of securing a
favorable rating even if the performance is good.
Perceptual Set: - this occurs when the rater’s assessment is influenced by previously
held beliefs. If the supervisors for example have a belief that employee hailing from 1
particular region is intelligent and hard working his subsequent rating of an employee
hailing from that region tends to be favorably high.
Status effect: - it refers to overrating of employee in higher-level jobs held in high
esteem, and underrating employees in lower-level-job or jobs held in low esteem.
It is not the rater’s errors alone that are barriers to accurate and valid measurement of
employee performance.
Exhibit 10.2
Here is a bizarre case of performance appraisal. A pulp making unit located at Harihae in
Karnataka, hired 40 engineers in 1994, as management trainees. The new hires were fresh
from, REC, Suratkal, and other prestigious institutions. Obviously they were toppers in
their respective branches and institutions.
Solving Rater’s Problems
the best way to overcome the problems is to provide training to the raters. At HewlettPackard, a 2 day training course is organized every year to prepare managers to handle
appraisals better. Not that training is a ‘cure-all’ for all the ills of appraisal systems. From
a practical point of view, several factors, including the extent which pay is related to
performance ratings, union pressure, turnover rates, time constraints and the need to
justify ratings may be more important than training, influencing the ratings they actually
give. This means that improving rating systems involves not just training the raters but
remedying outside factors such ass union pressure. And it means that rater training, to be
effective, should also add real life problems such as the fact that union representatives
will try to influence supervisors to rate everyone high.
Factors that help improve accuracy:
1. The rater has observed and is familiar with behaviors to be appraised.
2. The rater has documented the behaviors to improve the recall.
3. The rater has a checklist to obtain and review job-related information.
4. The rater is aware of personal biases and is willing to take action to minimize their
Factors that may lower accuracy:
1. The rater rates ratees only when administrative actions are contemplated.
2. The rater tends to inflate ratings when the ratees receive scores and results of
appraisals.
3. The rater tends to recall more behaviours known to be of particular interest to higher
level managers, whether or not they are pertinent, when his or her ratings are reviewed by
such authorities.
4. The rater is unable to express him or herself honestly and unambiguously.
5. Appraisal systems, processes and instruments fail to support the rater.
6. The rater has to rate employees on factors that are poorly defined.
7. Finally, the supervisor/rater must be trained to conduct the appraisal interview. For
many raters, this is a difficult task, especially when the appraisal is unfavorable to the
rater.
What should be rated?
One of the steps in designing an appraisal programme is to determine the evaluation
criteria. It is obvious that the criteria should be related to the job. The six criteria for
assessing performance are:
1. Quality: The degree to which the result or process of carrying out an activity
approaches perfection in terms of either conforming to some ideal way of performing the
activity, or fulfilling the activity’s intended purpose.
2. Quantity: The amount produced, expressed in monetary terms, number of units, or
number of completed activity cycles.
3. Timeliness: the degree to which an activity is completed or a result produced, at the
earliest time desirable from the standpoints of both co-coordinating with the outputs of
others and of maximizing the time available for other activities.
4. Cost Effectiveness: the degree to which the use of the organization’s resources (e.g.
human, monetary, technological and material) is maximized in the sense of getting the
highest gain or reduction in loss from each unit or instance of use of a resource.
5. Need for supervision: the degree to which a job performer can carry out a job
function without either having to request supervisory assistance or requiring supervisory
intervention to prevent an adverse outcome.
6. Interpersonal impact: the degree to which as performer promotes feeling of selfesteem, goodwill and co-operation among co-workers and sub-ordinates.
These criteria relate to past performance and behavior of an employee. There is also the
need for assessing, as was pointed out earlier, the potential of an employee for future
Appraisal of Potential at Philips
More and more number of organizations are trying to assess potential of their employees,
particularly at the managerial level. Cadbury India, Sandoz, Pfizer, Mafatlal, Philips,
National Organic Chemical Industries, Glaxo and P&G are a few of the companies which
seek to top managerial potential.
At Philips a 2 by 2 matrix is used to assess performance and potential to perform. The
vertical axis measures potential while the horizontal, actual performance. Both are further
subdivided into parameters – high and low – resulting in 4 quadrants of classification.
High
Problem
Children
Stars
Low
Problem
Separation
Solid
Citizens
Low
High
Potential
Performance
The Philips Model
Low Potential-Low Performance: these employees are categorized as question marks.
The company asks such employees to improve their performance levels. Failure to
improve would result in their planned separation.
High Potential-Low Performance: these are the problem children. In order to help them
improve their performance, these employees are shifted to new locations to work and are
closely monitored. If performance levels do not improve, these employees are reclassified
as question marks and the separation process initiated.
High Potential-High Performance: these are the star performers. They have to be kept
engaged with complex assignments all the time and groomed to take up the top positions.
Otherwise, they might leave.
Low Potential-High Performance: these are called as solid citizens and constitute 70 to
75 % of the total number of employees in any organization. They have skills but lack the
potential to grow beyond their current job-profile. The organization has to constantly
recognize their limitations and take care of their needs.
In order to assess employee potential, Philips has adopted the system that prevails at
Philips NV, Holland. The system at Philips NV uses 4 broad attributes – conceptual
effectiveness, operational effectiveness, interpersonal effectiveness and achievement
Coming to the six criteria, it may be stated that the first 4 – quality, quantity, timeliness
and cost effectiveness – are objective in nature; and the last 2 - need for supervision and
interpersonal impact – are subjective. Objective measures are quantifiable and are
therefore highly useful in measuring the performance of an employee. But performance
of employees should not always be evaluated against the amount of deposits mobilized
for his or her bank. The effort put in by him/her, the contacts he/she has established, the
image about the bank he/she has created in the eyes of public, and if relationships he/she
has maintained with subordinates speak more reliably about the manager’s performance.
Here comes the relevance of the subjective criteria. However, as subjective measures are
dependent upon human judgments, they are prone to the kinds of errors we noted earlier –
leniency or severity, central tendency, halo and the like. To be useful, subjective
measures must be based on a careful analysis of the behaviors viewed as necessary and
important for job performance.
Timing of Evaluation
How often should an employee be assessed? The general trend is to evaluate once in 3
months, or six months, or once in a year. According to a survey conducted in 1997 by
Arthur Anderson, 70 percent of the organizations conduct performance appraisal once a
year. Newly hired employees are rated more frequently than the older ones. Frequent
assessment is better than phased evaluation. Feedback in the latter is delayed and the
advantage of timely remedial measures by the employee is lost. Frequent evaluation gives
constant feedback to the rate, thus enabling him or her to improve performance if there is
any deficiency. The performance of trainees and probationers should be evaluated at the
end of respective programme.
METHODS OF APPRAISAL
The last to be addressed in the process of designing an appraisal programme is to
determine methods of evaluation. Numerous methods have been devised to measure the
quantity and quality of employee’s job performance. Each of the methods discussed
could be effective for some purposes, for some organizations. None should be dismissed
or accepted as appropriate except as they relate to the particular needs of the organization
or of a particular type of employees. Broadly, all the approaches to appraisal can be
identified into (i) past-oriented methods, and (ii) future-oriented methods. Each group has
several techniques as shown in the figure below:
Appraisal
Methods
Past-Oriented Methods
Rating Scales: This is the simplest and most popular technique for appraising employee
performance; the typical rating-scale system consists of several numerical scales, each
representing a job-related performance criterion such as dependability, initiative, output,
attendance, attitude, co-operation, and the like. Each scale ranges from excellent to poor.
RATING SCALE
Instructions: For the following performances factors, please indicate on the rating
Scale your evaluation of the employee named below:
Employee’s Name:
Rater’s Name
Department
Date.
Excellent
5
Good
4
Acceptable
3
1. Dependability
------
------
------
-----
-----
2. Initiative
------
------
------
-----
-----
3. Overall Output
------
------
------
-----
-----
4. Attendance
------
------
------
-----
-----
5. Attitude
------
------
------
-----
-----
6. Co-Operation
------
------
------
-----
-----
------
------
------
-----
-----
------
------
------
-----
-----
------
------
------
-----
-----
------
------
------
-----
-----
20. Quality of Work
TOTAL
+
+
Fair
2
+
Poor
1
+
TOTAL SCORE
Rating scales offer the advantages of adaptability, relatively easy use and low cost.
Nearly every type of job can be evaluated in a short time, and the rater does not need any
training to use the scale.
The disadvantages of this method are several. The rater’s biases are likely to influence
evaluation, and the biases are particularly pronounced on subjective criteria such as cooperation, attitude and initiative. Furthermore, numerical scoring gives an illusion of
precision that is really unfounded.
Checklist: Under this method a checklist of statements on the traits of the employee and
his or her job is prepared in 2 columns – viz., a ‘Yes’ column and a ‘No’ column. All that
the rater (immediate superior) should is tick the ‘Yes’ column if the answer to the
statement is positive and in column ‘No’ if the answer is negative. A typical checklist is
given in the table below. After ticking off against each item, the rater forwards the list to
the HR department. The HR department assigns certain points to each ‘Yes’ ticked.
Depending upon the number of ‘Yes’ the total score is arrived at. When points are
allotted to the checklist, the technique becomes a weighted checklist. The advantages of
as checklist are economy, ease of administration, limited training of rater, and
standardization. The disadvantages include susceptibility to rater’s biases (especially the
halo effect), use of personality criteria instead of performance criteria, misinterpretation
of checklist items, and the use of improper weights by the HR department.
Table: - Checklist for Operators
SR.
QUESTIONS
YES
NO
1.
Is the employee really interested in the job?
-
-
2.
Does he or she possess adequate knowledge about the job
-
-
3.
Is his or her attendance satisfactory?
-
-
4.
Does he/she maintain his/her equipment in good condition?
-
-
5.
Does he/she co-operate with co-workers?
-
-
6.
Does he/she keep his/her temper?
-
-
7.
Does he/she obey orders?
-
-
8.
Does he/she observe safety precautions?
-
-
9.
Does he/she complete what he/she commences?
-
-
10.
Does he/she evade responsibility?
-
-
NO.
Forced Choice Method: In this, the rater is given a series of statements about an
employee. These statements are arranged in blocks of 2 or more, and the rater indicates
which statement is most or least descriptive of the employee. Typical statements are :
1. Learns fast _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ works hard
2. Work is reliable_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ performance is a good example for
3. Absents often_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ others usually tardy.
As in the checklist method, the rater is simply expected to select the statements that
describe the rate. Actual assessment is done by the HR Department.
This approach is known as the forced choice method because the rater is forced to select
statements.
Forced Distribution Method: One of the errors in rating is leniency – clustering a large
number of employees around a high point on a rating scale. The forced distribution
method seeks to overcome the problem by compelling the rater to distribute the ratees on
all points on the rating scale.
The method operates under an assumption that the employee performance level conforms
to a normal statistical distribution. Generally, it is assumed that employee performance
levels conform to a bell shaped curve. For example, the following distribution might be
assumed to exist – excellent 10 %, good 20 %, average 40 %, below average 20 %, and
unsatisfactory 10 %.
The major weakness of the forced distribution method lies in the assumption that the
employee performance levels always conform to a normal distribution. In organizations
that have done a good job of selecting and retaining only the good performers, the use of
forced distribution approach would be unrealistic, as well as possibly destructive to the
employee morale.
Critical Incidents Method: The critical incidents method of employee assessment has
generated a lot of interest these days. The approach focuses on certain critical behaviors
of an employee that make all the difference between effective and non-effective
performance of a job. The supervisors as and when they occur record such incidents.
Examples of critical incidents of a plant manager are given in the following table:
Behaviorally Anchored Rating Scales:
Behaviorally Anchored Scales, sometimes called behavioral expectation scales, are rating
scales whose scale points are determined by statements of effective and ineffective
behaviors. They are said to be behaviorally anchored in that the scales represent a range
of descriptive statements of behavior varying from the least to the most effective. A rater
must indicate which behavior on each scale best describes an employee’s performance.
Behaviorally anchored rating scales (BARS) have the following features:
1. Areas of performance to be evaluated are identified and defined by people who will
use the scales.
2. The scales are anchored by descriptions of actual job behavior that, supervisors agree,
represent specific levels of performance. The result is a set of rating scales in which both
dimensions and anchors are precisely defined.
3. All dimensions of performance to be evaluated are based on observable behaviors and
are relevant to the job being evaluated since BARS are tailor-made for the job
Field Review Method
This is an appraisal by someone outside the, assessor’s own department. Usually
someone from the corporate office or the HR department. The outsider reviews Employee
records and holds interviews with the ratee and his or her superior.
This method is primarily used for making promotional decision at the managerial level.
Field reviews are also useful when comparable information is needed from employees in
different units or locations. Two disadvantage of this method are:1. An "outsider" is usually not familiar with conditions in an employees’ work
environment which may affect the employee's ability or motivation to perform.
2. An 'outsider' review dose not have the opportunity to observe employee behavior of
performance over a period of time and in a variety of situations. But only in an artificially
structured interview situation which extends over a very short period of time.
Performance Tests and Observations
With limited number of jobs, employee assessment may be based upon a test of
knowledge or skills. The test may he of the paper-and-pencil variety or an actual
demonstration of skills. The test must he reliable and validated to be useful. Even then,
performance tests are apt to measure potential more than actual performance. In order for
the test to be job related, observations should he made under circumstances likely to be
encountered. Practicality may suffer if costs of test development or administration arc
high.
Confidential Records
Confidential records arc maintained mostly in government Departments. though its
application in the industry .not ruled out. ITI. for example. had followed this method for a
long time. Called the Annual Confidential Report (ACR). the approach had 14 items-(i)
attendance. (ii) self-expression (written or oral). (iii) ability to work with others. (iv)
leadership. (v) initiative. (vi) technical ability (job knowledge). (vii) ability to understand
new material. (viii) ability to reason, (ix) originality and resourcefulness. (x) areas of
work that suits the person best. (xi) judgement. (xii) integrity. (xiii) responsibility and.
(xiv) and defect-indebtedness. Memo served. etc. Twelve of these were filled on a fourpoint grade scale (Excellent. Good. Fair and Poor).
For integrity. there were special instructions from the management. Justification was
required for outstanding or poor rating. Over:!!! rating on a five-point scale was
separately given (Outstanding. Very good. Good. Average, Poor). again with justification
for rating as outstanding or poor. Recommendations for promotion were also given. The
ACR contained recommendations and signature of the rater. the head of the department
and the CMD.
The system was highly secretive and confidential Feedback to the assessee was given
only in case of an adverse entry. The AC'R was highly subjective. Ratings were easily
manipulated because the evaluation was linked to promotion. Even ITI has discontinued
ACR system for these reasons.
Essay Method
In the essay method the rater must describe the employee within a number of broad
categories such as (i) the rater's overall impression of the employee's performance. (ii),
the promo ability of the employee (iii) the jobs that the employee is now able or qualified
to perform (.iv) the strengths and weaknesses of the employee. and (v)the training and
the development assistance required by the employee. Although this method may be used
independently, it is most frequently found in combination with others. It is extremely
useful in filing information gaps about the employees that often occur in the better
structured checklist method.
The strength of the essay method depends on the writing skills and analytical ability
of the rater.
However many raters do not have good writing skills. They become confused about
what to say. How much they should state and the depth of the narrative The essay method
can consume much time because the rater must collect the information necessary to
develop the essay and then he or she must write it The essay method also depends on the
memory power of the rater.
A problem with this method is that the rate may be rated on the quality of the
appraisals that they give. The quality standard for the appraisal may be unduly influenced
by appearance rather than content. Thus. a 'high quality' appraisal may provide little
useful information about the performance of the rate.
Cost Accounting Method
This method evaluates performance from the monetary returns the employee yields to
his or her organisation. A relationship is established between the cost included in keeping
the employee and the benefit the organization derives from him or her. Performance of
the employee is then evaluated based on the established relationship between the cost and
the benefit.
Comparative Evaluation Approaches
These are a collection of different methods that compare one worker's performance
with that of his/her co-workers. Comparative appraisals are usually conducted by
supervisors. As these appraisals can result in a ranking from best to worst, they are useful
in deciding merit-pay increases, promotions and organisational rewards. The usual
comparative forms used in this kind of evaluation are the ranking method and the paired
comparison method.
Ranking Method
In this, the superior ranks his or her subordinates in the order of their merit, starting
from the best to the worst. All that the HR department knows is that A is better than B.
The, 'how' and 'why' are not questioned, nor answered. No attempt, is made to
fractionalise what is being appraised into component elements. This method is subject to
the halo and recency effects, although rankings by two or more raters can be averaged to
help reduce biases. Its advantages include ease of administration and explanation.
Paired-comparison Method
Under this method the appraiser compares each employee with every other employee
one at a time. For example there are five employees named A, B. C. D and E. The
performance of A is first compared with the performance of B and a decision is made
about whose performance is better. Then A is compared with C. D and E in that order.
The same procedure is repeated for other employees. The number of comparisons may be
calculated with the help of a formula which reads thus:
N(N-1)/ 2 where N stands for
the number of employees to be compared. If there are 10 employees, the number of
comparisons will be 10(10-1)/2 = 45.
After the completion of comparison, the results can be tabulated and a rank is created
from the number of times each person is considered to be superior.
Future-oriented Appraisals
Is it not enough if only the past performance is assessed . How an employee can
perform in the days to come is equally important. This can be assessed by focusing on
employee potential or setting future performance goals. The commonly used futureoriented techniques are MBO, psychological appraisals, and assessment centres.
MANAGEMENT BY OBJECTIVES
It was Peter F. Drucker who first gave the concept of MBO to the world way back in
1954 when his The Practice of Management was first published. The MBO concept, as
was conceived by Drucker, reflects a management philosophy which values and utilizes
employee contributions. Application of MBO in the field of performance appraisal is a
recent thinking.
Four Steps in the MBO Process
How MBO works can be described in four steps:
The first step is to establish the goals each subordinate is to attain. In some
organisations, superiors and subordinates work together to establish goals. In others.
Superiors establish goals for subordinates. The goals typically refer to the desired
outcome to be achieved. These goals can then be used to evaluate employee performance.
The second step involves setting the performance standard for the subordinates in a
previously arranged time period. As subordinates perform, they know fairly well what
there is to do, what has been done, and what remains to be done.
In the third step, the actual level of goal attainment is compared with the goals agreed
upon. The evaluator explores reasons for the goals that were not met and for the goals
that were exceeded. This step helps determine possible training needs. It also alerts the
superior to conditions in the organization that may affect a subordinate but over which
the subordinate has no control.
The final step involves establishing new goals and, possibly new strategies for goals
not previously attained. At this point, subordinate and superior involvement in goalsetting may change. Subordinates who successfully reach the established goals may be
allowed to participate more in the goal setting process the next time. The process is
repeated. As with other approaches. MBO too has been criticised. One comment made
against the approach is that it is not applicable to all jobs in all organisations. Jobs with
little or no flexibility. Such as assembly-line work, are not compatible with MBO. An
assembly-line worker usually has so little job flexibility that the performance standards
and objectives are already determined. The MBO process seems to be most useful with
managerial personnel 'and employees who have a fairly wide range of flexibility and selfcontrol in their jobs. Besides, when the result of an MBO system are to be used to
allocate organisational rewards, employees may be less likely to establish challenging
goals-goals they are confident that they can accomplish. Further, the allocation of merit
pay on a semi-annual or annual basis may encourage the setting up of goals with short
time horizons to the disadvantage of important long-term goals.
The performance appraisal presently followed in L&T reflects the principles of MBO.
Psychological Appraisals
Large organization employs full-time industrial psychologists. When psychologists are
used for evaluations. They assess an individual’s future potential and past performance.
The appraisal normally consists of in-depth interviews, psycho1ogical tests. Discussions
with supervisors and a review' of other evaluations. The psychologist then write an
evaluation of the employee's intellectual, emotional, motivational and other-related
characteristics that suggest individual potential and may predict future performance. The
evaluation by the psychologist may be for a specific job opening for which the person is
being considered. Or it may be a global assessment of his or her future potential. From
these evaluations. Placement and development decisions may be made to shape the
person's career. Because this approach is slow and costly.
LARSEN AND TOUBRO, HUMAN RESOURCE DEVELOPMENT—
PERFORMANCE APPRAISAL SYSTEM
CONFIDENTIAL NAME EMS. PS. NO
PA FORM:28
CADRE GROUP DEPT.
EXECUTIVES &
SUPERVISORS
LARSEN &TOUBRO LIMITED
HUMAN RESOURCE DEVELOPMENT-PERFORMANCE APPRAISAL
SYSTEM
PERFORMANCE ANALYSIS AND REVIEW
APRIL 1993 TO MARCH 1994
NAME
DATE SIGNATURE
EMPLOYEE
IMMEDIATE SUPERVISOR
NEXT SUPERIOR
1.
2.
PERSONNEL/ HRD DEPT.
A]PERFORMANCE REVIEW AGAINST B1]
BY
OBJECTIVES
SUPERIOR
1.
2.
3.
INADEQUATE
ADEQUATE
GOOD
RESULTS
AND ACHIEVED
V. GOOD
AGREED
OBJECTIVES
TARGETS
BY EMPLOYEE
OUTSTANDING
A1]
IMMEDIATE
A2]
SELF REVIEW (by employee)
SIGNIFICANT CONTRIBUTORS (JOBS OR PROFESSION RELATED –NOT COVERED ABOVE)

IMPORTANT FACTORS FACILITATING PERFORMANCE
 IMPORTANT FACTORS HINDERING PERFORMANCE
B2] PERFORMANCE AGAINST OBJECTIVES(BY IMMEDIATE SUPERIOR)
2.
3.
4.
5.
Ability to determine and initiate
actions that result in improve
handling of jobs, without
waiting to be told.
INTERPERSONAL &
TEAM RELATIONSHIP
Ability to interact effectively
with people at all levels to gain
their confidence and respect and
work in a collaborative and
participative manner.
RESOURCEFULNESS
Ability to muster resources to
achieve desired results and
device ways and means of
solving problems in difficult
situations.
Ability to convey thoughts and
feelings clearly both through
oral as well as written
expressions
for
better
understanding.
COMMUNICATION
SKILLS
C2] AREAS OF STRENGTH AND IMPROVEMENTS (by immediate superior)
INADEQUATE
INITIATIVE
ADEQUATE
Ability to think new and better
ways of doing things that results
in introduction of new ideas or
improvements of the systems
and operations.
INADEQUATE
GOOD
INNOVATIVENESS
V. GOOD
1.
OUTSTANDING
OUTSTANDING
V. GOOD
GOOD
ADEQUATE
C1] Appraisal of Critical Attributes(by immediate
superior)
C2]
CRITICAL ATTRIBUTES
C3] Potential Areas Of Growth (By Immediate Superior)
D] Recommendations For Training And Development( By Immediate Superior)
D1] IN-COMANT TRAINING PROGRAMMES
Description
1.
Code
Description
2.
D2] OTHER TRAINING PROGRAMMES
1.
2.
D3] SPECIFIC DEVELOPMENT PLANS
Proposed action
(tick as applicable)
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Details of Actions Required
Job rotaion
Job enlargement
Special assignment
Deputatiomn of other dept
Others(please specify)
E]
COMMENTS BY NEXT SUPERIOR(S)
E1] ON SPECIFIC DEVELOPMENT PLANS STATED ABOVE IN D3
E2] OVERALL OBSERVATIONS:
F] FOR USE BY PERSONNEL/ HRD CO -ORDINATOR
Code
ASSESSMENT CENTRES
Mainly used for executive hiring, assessment centre are now "being used for evaluating
executive or supervisory potential. An assessment centre is a central location where
managers may come together to have their participation in job-related exercise evaluated
by trained observers. The principal idea is to evaluate managers over a period of time say
one to three days, by observing (and later evaluating) their behaviour across a series of
select exercises or work samples. Assesses are requested to participate in in-basket
exercises, work groups (without leaders), computer simulations, role paying, and other
similar activities which require the same attributes for successful performance, as in the
actual job. After recording their observations of ratee behaviors, the raters meet to discuss
these observations. The decision regarding the performance of each assessee is based
upon this discussion of observations. Self-appraisal and peer evaluation are also thrown
In for final rating.
The characteristics assessed in a typical assessment centre include assertiveness,
persuasive ability, communicating ability, planning and organisational ability, self –
confidence, resistance to stress, energy level, decision – making, sensitivity to the
feelings of others, administrative ability, creativity and mental alertness. It is a
formidable list which is quite difficult to measure accurately over three days, though
there would be sizable number of trained observers and psychologists.
First developed in the US and the UK in 1943, the assessment centre is gaining
popularity in our country, Crompton greaves, Facher, HLL and Modi Xerox are using the
technique with results being highly positive.
Assessment Centre - Many Takers
 Ranbaxy retained the services of a team of psychologists from the UK-based
Kelly& King to take the executives (of Ranbaxy) through an assessment center.
20 star manager went through the exercise.
 Santrupt Misra, Director- Birla Management Corporation had plans for a similar
exercise to be held at Gyanodaya, the Aditya Birla learning centre. Misra first
used the assessment centre concept four years ago on 150 middle and senior level
managers.
 Old timers like Tata have created their own assessment centers, and so have the
talent centric companies' like Wipro and Cognizant.
 SHL, a HR consulting firm has worked with over 100 companies conducting dose
to 1,000 assessment centers.
 Consulting firm ECS (formerly known as Eicher Consulting Services) does a
number of assessments in a month for a variety of clients like Tata Steel, ING
Vysya and the host of BPO outfits.
 ICICI Bank uses assessment centre as a recruitment and selection tool to find the
best talent, while GE India subsidiary GECIS has used it on 20% of it5 middle
managers.
The problem with the assessment centres is their cost Not only are the asses sees away
from their jobs while the company pays for their travel and lodging, but the evaluators are
often company managers who are assigned to the assessment centre for short durations.
These managers are often supplemented by psychologists and HR specialists who run the
centre and also make evaluations. Hence this approach is cost - effective only in large
organisations.
Assessment-centre staff is often influenced by subjective element; such as personality
of the candidates: Raters tend to evaluate the quality of the individual's social skills rather
than the quality of the decisions he/she makes. Assessment -centre ratings seem to be
strongly influenced by the participant's interpersonal skills.
The approach also involves real hazards. One of the most obvious is the examinationtaking syndrome. Solid performers in day-to-day operations feel suffocated in the
simulated environment. Another drawback is its potential adverse effect on those not
selected to participate in the exercise.
Employees who receive a poor report from the centre may react in negative ways.
Ideally, a rejected employee would return to his or her former job, satisfied that he or she
would not be promoted to a job he or she could not handle. However, a good performer at
one level may leave the organisation in order to remove the bad assessment report from
his or her work record. Thus, a poor report can demoralize an employee who was once an
asset.
Other problems include-strong and unhealthy sense of competition among assesses;
Difficulty of conducting the test frequently; and the possibility of overemphasizing the
test performance.
But a well-conducted assessment centre can and does achieve better forecasts of future
performance and progress than other methods of appraisal. Also, reliability, content
validity, and predictive validity are said to be high in the assessment centres.
The test also makes sure that the wrong people are not hired or promoted. Finally, the
Assessment centre test clearly defines the criteria for selection and promotion.
360-DEGREE FEEDBACK
As stated earlier, where multiple raters are involved in evaluating performance, the
technique is called 360 degree appraisal. The 360 degree technique is understood as
systematic collection of performance data on an individual or group, derived from a
number of stakeholders--the stakeholders being the immediate supervisors. team
members, customers, peers, and self. In fact, anyone who has useful information on how
an employee does the job may be one of the appraisers.
The 360-degree appraisal provides a broader perspective about an employee's
performance. In addition, the technique facilitates greater self-development of the
employees. For one's development, multi-source feedback is highly useful. It enables an
employee to compare his or her perceptions about self with perceptions of others. Besides,
the 360-dcgree appraisal provides formalized communication links between an employee
and his or her customers. It makes the employee feel much more accountable to his or her
internal or external customers. The technique is particularly helpful in assessing soft
skills possessed by employees. By design, the 360-degree appraisal is effective in
identifying and measuring interpersonal skill, customer satisfaction, and team-building
skills.
However, there are drawbacks associated with the 360-degree feedback. Receiving
feedback on performance from multiple sources can be intimidating. It is essential that
the organisation create a non - threatening environment by emphasizing the positive
impact of the technique on an employee's performance and development. Further, firms
that use the technique take a long time on selecting the rater, designing questionnaires,
and analyzing the data. In addition; multiple raters are less adept at providing a balanced
and objective feedback than the supervisors who are sought to be replaced. Raters can
have enormous problems separating honest observations from personal differences and
biases.
Pitfalls notwithstanding, more and more number of firms are using the 36O-degree
appraisal technique to assess the performance of their employees.
PERFORMANCE INTERVIEW
Performance interview is another step in the appraisal process. Once appraisal has been
made of employees, the raters should discuss and review the performance with the ratees,
so that they will receive feedback about where they stand in the eyes of superior.
Feedback is necessary to effect improvement in performance, especially when it is
inadequate. Specifically, performance interview has three goals: (i) to change behaviour
of employees whose performance does not meet organisational requirements or their own
personal goals. (ii) To maintain the behaviour of employees who perform in an
acceptable manner and (iii) to recognize superior performance behaviours so that they
will be continued.
Raters offer feedback to the ratees through several methods-tell and sell, tell and listen,
problem solving and mixed. In tell and sell, also called directive interview, the
interviewer let assesses know how well they are doing and sells them on the merits of
setting specific goals for improvement, if needed. The tell and listen interview provides
the subordinates with chances to participate and establish a dialogue with their superiors.
Its purpose is to communicate the rater's perceptions about the ratee's strength and
weaknesses and let the subordinates respond to these perceptions. In the problem -solving
or participative interview, an active and open dialogue is established between the superior
and the subordinate. Not only are perceptions shared, but also solutions to problems are
presented, discussed, and sought. Mixed interview is a combination of tell and sell and
problem solving interviews.
Whatever be the approach followed, the emphasis in the interview should be on
counseling and development and not on criticism, witch-hunting and buck passing.
Because of the significance of appraisal interview, every effort must be made to make it
effective. Guidelines given in Table below will help make the interview successful.
GUIDELINES FOR EFFECTIVE APPRAISAL INTERVIEW
 Select a good time
 Minimize interruptions
 Welcome, set at ease
 Start with something positive
 Ask open – ended questions to encourage discussion
 Listen
 Manage eye contact and body language
 Be specific
 Rate behaviour, not personality
 Layout development plan
 Encourage subordinate participation
 Complete form
 Set mutually agreeable goals for improvement
 End in a positive, encouraging note
 Set time for any follow – up meetings
USE OF APPRAISAL DATA
The final step in the evaluation process is the use of evaluation data. The data and
information generated through performance evaluation must be used by the HR
department.
It may be recollected that the most significant rewards employers offer to employees
are:
1. Money to purchase goods and services required not only for current and future survival,
but also for the luxuries modern life has to offer.
2. The opportunity to use innate and learned skills and talents in a productive manner that
the individual and his or her managers and co-workers recognize as valuable.
3. Opportunities to interact with other people in a favorable working environment.
4. Opportunities to learn, grow, and make full use of their potential.
5. A sense of performance and stability through the continuing existence of the
organisation and the job.
6. The opportunity to perform work assignments within an environment that not only
protects. But promotes physiological, emotional and psychological health.
In one way or another, data and information outputs of a performance-appraisal
programme can critically influence these coveted employer-employee reward
opportunities. Specifically, the data and information will be useful in the following areas
of HRM:
I. Remuneration administration
2. Validation of selection programmes
3. Employee training and development programmes
4. Promotion, transfer and lay-off decisions
5. Grievance and discipline programmes
6. HR planning
EDWARD DEMING ON PERFORMANCE APPRAISAL
Towards the end of this section, it is worthwhile to note Edward Deming's views on
performance evaluation. Deming is opposed to employee assessment, because it:
I. Rewards people for manipulating the system rather than improving it,
2. Is often self-defeating,
3. Is inconsistent with team-work,
4. Acts as a substitute for proper management, and
5. Is inherently unfair.
His alternatives to performance appraisal are:
1. Meticulous selection of leaders,
2. Educating workers about their obligations, and improved training and education after
selection,
3. Getting leaders to function as colleagues rather than as judges,
4. Subordinate performance to be assessed using statistical data,
5. Three to four hours interview annually, with subordinates aimed at support and
encouragement, and
6. Accommodation to lone workers.
CHALLENGES OF PERFORMANCE APPRAISAL
With the increased significance of performance appraisal, challenges confronting the
system are mounting. One serious challenge facing the performance appraisal system
relates to assessment of self-managed teams. Popularly called empowered teams, these
self-managed teams create special challenges for performance appraisal-empowered
teams perform without supervisors. Historically, if one recalls, it is the supervisor who
assesses the performance of his or her subordinates. Another challenge is that both,
individual and team performance, need to be measured. A suitable device needs to be
developed to assess the performance of empowered teams because more and more firms
use such teams to enhance productivity. Figure below contains a typical model of team
appraisal.
Identify
KRAs
critical to business
during the year
Evaluate performance of
the
team
against
predetermined targets
Set tangible targets for
each KRA. Incorporate
stretch elements for each
target. Fix the minimum
acceptable target
Communicate the
results to ensure
transparency
Identify individuals who have excelled.
Discount subjective factors by including
assessors from outside the team to
identify outstanding individuals.
Determine
intangible
parameters
(like
initiative), which indicate
pockets of individual
excellence with the team
Measure
the
performance of the
team (actual versus
targets) every month
Figure: Appraising Teams
The Following table contains challenges of Performance Appraisal -
Challenges of Appraisal:
 Create a culture of excellence that inspires every employee to improve and lend
himself or herself to be assessed
 Align organizational objectives to individual aspirations
 Clear growth paths for talented individuals
 Provide new challenges to rejuvenate careers that have reached the plateau stage
 Forge a partnership with people for managing their careers
 Empower employees to make decisions without the fear of failing
 Embed teamwork in all operational processes
 Debureaucratise the organization structure for ease of flow of information.
LEGAL ISSUES ASSOCIATED WITH PERFORMANCE
APPRAISAL
Performance appraisal data as stated earlier, are used to make many important HR
decisions (e.g. Pay, promotion, training, transfer and termination). The appraisal system
is a common target of legal disputes by employees involving charges of unfairness and
bias. An employee may seek the legal recourse to obtain relief from a discriminatory
performance appraisal. One such case goes back to 1980s. In 1981, three junior
employees of Williamsons Magor were promoted superseding 15 of their senior
workmen. The basis for promotion was recommendations of the departmental heads and
other authorities. The 15 workmen challenged the promotion to the three workmen in the
Supreme Court and the court upheld the contention of the petitioners on the ground that
he said recommendations of departmental heads and authorities were arbitrary and could
not be the main basis for effecting promotions.
There are several recommendations 10 assist employees in conducting fair performance
appraisal and avoiding legal suits. Gleaned from case laws, these recommendations are
intended to be prescriptive measures that employers should take to develop fair and
legally defensible performance appraisal systems.
1.
Legally Defensible Appraisal Procedures

All personnel decisions should be based on a formal standardized performance
appraisal system.

Any performance appraisal process should be uniform for all employees within a
job group, and decisions based on those performance appraisals should he
monitored for differences according o race, sex. national origin. Religion or age
of the employees. While obtained differences as a function of these variables are
not necessarily illegal. an organization will have more difficulty defending an
appraisal system with ratings related to these variables.

All specific performance standards should be formally communicated to
employees.

All employees should be able to review their appraisal results.

There should be a formal appeal process for the rate to rebut rater judgments.

All raters should be provided with written instructions and training on how to
conduct appraisals properly to facilitate systematic, unbiased appraisals.

All personnel decision-makers should be well informed of anti-discrimination
laws.They should be made aware of the fine distinctions between legal and illegal
activities regarding decisions based on appraisals.
2. Legally Defensible Appraisal Content

Any performance appraisal content should be based on a job analysis.

Appraisals based on traits should be avoided.

Objectively verifiable performance data (e.g. sales, productivity, not ratings)
should be used whenever possible.

Constraints on an employee's performance that are beyond the employee's control
should be prevented from influencing the appraisal to ensure that the employee
has an equal opportunity to achieve any given performance level.

Specific job-related performance dimensions should be used rather than global
measures or single overall measures.

The performance dimensions should be assigned weights to reflect their relative
importance in calculating the composite performance score.
3. Legally Defensible Documentation of Appraisal Results
 A thoroughly written record of evidence leading to termination decisions should
be maintained(e.g. performance appraisal and performance counseling to advise
employees of performance deficit,
and to assist poor performers in making
needed improvements)
 Written documentation (e.g. specific behavioural examples) for extreme ratings
should he required and they must be consistent with the numerical ratings.
 Documentation requirements should he consistent among the raters.
4. Legally Defensive Raters
 The raters should be trained in how to use an appraisal system
 The raters must have the opportunity to observe the ratee first hand or to review
important ratee performance products
 Use of more than rater is desirable in order to lessen the amount of influence of
any one rater and to reduce the effects of biases. Peers, subordinates, customers,
and clients are possible sources
“WONDERFUL PLACE TO BE, AN EXCITING PLACE TO WORK”
As far as the Human Resource Department of Crescent Therapeutics Limited is
concerned, it consists of highly qualified people who have achieved their specialization in
this every field. The organization Structure for Human Resource development and
Personnel Department is as follows:
Manager - Human
Resources
Assistant ManagerHuman Resources
Executive Human Resource
Executive Human Resource
Executive Human Resource
Executive Human Resource
Executive Human Resource
We, as a group met Mr. Hans Raj Guleria who is one of the Asstt manager from the H.R.
Department.
When asked about the need for the H.R. Department in a firm, he explained that as CTL
is a company dealing with its customers directly and there is a direct interaction with the
customer in the service industry, it needed its employees to speak and interact with the
customer in an efficient manner in order to know the requirements and then suggest the
merchandises accordingly. In order to that it was necessary for the sales staff to be more
effective and hence to achieve this very target they need good people with good inter
personal communication skills, good knowledge and a sound sense of humor. And this
can be done only when an effective H.R. Department is in place.
Coming back to the topic, according to him, out of the 6 factors involved in the 360
degree appraisal system, they considered only 3 which are the colleagues, the supervisors
and the sub-ordinates.
1. The Grading Method:
In the grading method, a number of grades or classes are first established and carefully
defined. The rater evaluates the performance of an individual employee against these
standards and places him in one of these grades. The grades are related to qualities of
employees and grades are given to such qualities. The qualities may be like job
knowledge, judgement, leadership, co-operative attitude and so on. The grades may be
like A (for outstanding), B (for very good), C (for Good), D (for fair) and E (for poor).
The rater judges the performance of an employee and puts him under a suitable category.
This method is simple and quick but the rating of employees may not be accurate
particularly when the rater has to complete the rating of large number of employees
within a short period.
2. Graphic rating Scale Method:
This is one of the oldest and the most widely used methods of performance appraisal.
Here, four to twelve factors are selected, depending upon the category to which the
employee belongs. Some of these factors are quantity of output, quality of output,
initiative, integrity, dependability, etc. these factors and their degrees are marked on a
graph paper provided in the appraisal form. The rater has merely to check on the scale
where he thinks the employee belongs.
Quantity of Quality
Factors/Considerations 
Excellent
Output
of Integrity
Initiative
Output

Very Good


Good
Average
Below Average
Advantages of Graphic rating Scale Method:

(a) It is simple to understand and easy to operate,
(b) It is also not a time-consuming method,
(c) It is economical and ensures uniformity in the assessment of employees.
Comparison among the employees is easy as the details are clearly noted on the
paper by the rater.
Disadvantages of Graphic rating Scale Method:
(a) It puts heavy pressure on the rater as he has to consider four to twelve different
factors with five degrees for each factor. It is therefore, not possible to guarantee
the accuracy of the rater’s decision.
(b) The rater may be biased,
(c) The rater has to do a lot of paper work in the graphic rating scale method. He may
do marking mechanically, if he has to make appraisal of large number of ratees.
(d) Accurate rating may not be done as there is a very thin gap between two
considerations (e.g., very good and good).
After discussing about what the two different methods mean we now see how Crescent
Therapeutics Limited (CTL) actually implements these 2 methods in their organization.
According to Mr. Paresh Patel, it takes nearly 2 months for the H.R. Department
complete the whole process of performance and potential appraisal of all the employees
right from the Store Manger to the Trainee Sales Associate of the firm. The foremost
condition of the performance appraisal of an employee in CTL is that he / she should
have completed at least a year in the organization. And also there are no performance
appraisals for Part-timers in CTL.
The appraisals take place in the months of April - May and the results are announced
through a meeting which sees the attendance of the Manager – Human Resources as well
as the Store Manager of that particular branch store.
There are 3 grades designed for the employees of PRL which are
A – OUTSTANDING
B – AVERAGE / GOOD
C – ADEQUATE.
On the basis of the above 3 grades, all the employees are divided and placed among the
above slots. Any positive or negative feedback from an individual’s colleague, supervisor
or sub-ordinate sees him / her in the respective column.
The Organization Structure for CTL Operations Department
1 Store Manager
2 Assistant Store Managers
4 Floor Managers
Senior Sales Associates
Junior Sales Associates
Trainee Sales Associates
From the above given grades, only the individuals obtaining the topmost grade i.e. the A
grade gets a rise in the post or only those individuals can climb the ladder of this
organization structure. Although, most number of employees settle in the second grade i.e.
the Average grade. However, these employees are only given a nominal increment of Rs.
450/- in their monthly salaries. On the other hand, for the apex achievers apart from the
rise in the post in the organization, they are awarded with an increment of Rs.750/- in
their monthly salaries.
Whereas there is bad news for the employees at the bottom level, by terming them as the
‘Adequate’ people in the firm. They are not given any sort of incentives or increments for
that particular year and also are allowed to leave CTL at their request without any further
hesitation.
The process of appraisal is as follows:
First of all, before the appraisal period, there is a meeting held, which all the employees
on the lower or the higher post have to attend and it is mandatory for all. This meeting
takes place at least a week before the original appraisal period starts. In this very week all
the employees are informed individually about the date of his / her performance appraisal
and hence his / her attendance on that very appraisal day becomes compulsory. On a day
nearly 4-5 employees are appraised.
The employees are asked to be prepared for any sort of situations during the appraisals.
As an important step of their career, employees also take it very seriously and do their
work seriously before and after appraisals.
The appraisals in CTL Megastore are conducted by 2 Executives – Human Resources,
alternatively. These 2 executives are a part of the 3 – man committee formed for the
purpose of appraisals. The 3 – man Committee for the current year’s appraisal process
consisted of : 1. Mr.BISHAN DASS– Store Manager,
2. Mr.– HANS RAJ GULERIA Asstt manager(Human Resources),
3. Mr.SURINDER SINGH– Executive (Human Resources).
The employees are called for the appraisals along with their managers for his / her
appraisal.
1. Self – Evaluation: This is the first step in the appraisal process at PRL, where an
employee has to rate himself from 1 – 6, where 1 is the lowest point, whereas 6 is the
highest grade. The employee is actually given a questionnaire which contains approx. 30
questions. On these questions the employee has to award the points to himself.
The questions in the questionnaire are based on the following important aspects of his Job
Responsibility in Crescent Therapeutics Limited. Each aspect under this job
responsibility is given a different weightage. The chart showing the different aspects of
the Job Responsibility in CTL and their weightage is given below:
Sr. No.
Aspects of Job Responsibility
Weightage Given
1.
Target Cover
35 %
2.
Customer Focus
15 %
3.
Visual Merchandising & House Keeping
15 %
4.
Discipline & Attendance
10 %
5.
Honesty & Integrity
10 %
6.
Other Factors
15 %
2. Argument Starts: After the employee rates himself in the questionnaire on the above
mentioned aspects from 1 – 6, the same report is given to his superior in this case the
Floor Manager. There is an argument between the floor manager and the employee, if the
floor manager feels that the employee has overrated himself in any of the questions.
for instance, if a question is, “ How Clean Do I Keep My Section?”, and if the employee
awards himself full points i.e. 6 which means that his section is always clean and there is
no dust in his section, his floor manager may argue in the point and interfere that his
section is not always clean and he has found bits of paper on the floor of his section
several number of times, then the employee mat argue on that point or even go ahead
without having any sort of arguments by saying the words, “I Agree”. At this stage the
employee has full liberty to argue and repeatedly try and prove his point without affecting
or losing any points on it. And it is observed that the employees take full advantage of
this liberty at PRL.
3. Job Related Questions: The employees are then asked the questions relating to their
jobs, for instance, about the fabric knowledge, any extra knowledge that the employee
shares while selling the merchandises to the customers, any further developments he
would suggest towards the betterment of his own section, brand, or the store. The best
suggestions are also given bonus points. The employee is also enquired about his mbility
to move to any other branch of Piramyd Megastore at any point of time. The positive
response is given good points. he is also asked about the ultimate post that he would
strive for in this particular organization and the ways of achieving it. if he is found
capable and his means and ways to reach that position effective enough then he is given
good ratings which fall under the Other Factors category in the above table.
4. The Results: The employees are rated accordingly from the questionnaires, the out
comes of the arguments are also given significance and lastly the abilities of the
employee judged on the basis of the Job Related Questions. the employees are judged on
the following basis or distribution and cut-off percentages which are stated below:
Percentage cut-off
Rating
90 % and Above
Outstanding
80 % - 90 %
Good
80 % and Below
Adequate
And accordingly the increments are given in the salaries of the employees at PRL.
personally as a group we feel that the performance appraisal standards at CTL are quite
dicey and difficult as well, as a person in order to come true to these standards of the
appraisal committee is very difficult as we inquired with a few of the sales staff deployed
on the different levels of Crescent Therapeutics Limited
THE END