Presentation Zoinal

8/13/2019 Presentation Zoinal

1/41

1/27/2014 Performance Appraisal System: ACase Study of Prime Bank Ltd. 1

Performance Appraisal System:A comparative of systems practiced in

Prime Bank

Presented by:Md. Masud Karim

10thBatchID : 3 06 10 007


2/41


Introduction Performance management is a system for

managing, evaluating and developing theperformance of employees, which provides a

sound basis for the effective management ofperformance/development. The main objectives ofperformance management system are to maximizeperformance, support the development ofcompetencies, focus on performance whichsupports objectives in higher level plans, etc. It isreally a very sensitive issue which needs to behandled with utmost fairness and transparency.


3/41


The study is based on TraditionalPerformance Appraisal System and

Revised (Present) Performance AppraisalSystem of Prime Bank Limited. The studymainly concentrates on how effective theRevised (Present) Performance Appraisal

System are operating and seeks someuseful guidelines for further improvementof the present system.

Introduction


4/41


Objectivesi) Make an overview of the performance appraisal

system in Prime Bank Limited

ii) Undertake a literature review on performancemanagement system.

iii) Conduct survey with the employees of the Bank

with the help of questionnaire and

iv) Provide some recommendations for improving

the existing appraisal system in the Bank.


5/41


Methodology Relevant data have been collected both

from primary and secondary sources. In-

depth interview, questionnaire andobservation method were used as asource of primary data when website,service rules, job descriptions,

performance evaluation form, and otherrelevant papers were used as a source ofsecondary data.


6/41


Company Profiles


7/41


HistoryThe study is based on Prime Bank Limited, a leading privatecommercial bank of Bangladesh. It was incorporated as a publiccompany in Bangladesh under Companies Act 1994. It

commenced its banking business with one branch from April 17,1995 under the license issued by Bangladesh Bank. Presently the

bank has 50 (fifty) branches all over Bangladesh and a boothlocated at Dhaka Club, Dhaka. Out of the above 50 (fifty)

branches, 05 (Five) branches are designated as Islamic Branch

complying with the rules of Islamic Shariah. The principalactivities of the Bank are to provide all kinds of commercial

banking services to its customer through its branches inBangladesh.


8/41


Special Features of the Bank Prime Bank Ltd. is engaged in conventional commercial banking. It is the pioneer in introducing and launching different customer

friendly Deposit Schemes. For uplifting the standard of living of the limited income group of

population, the Bank has introduced Consumer Credit by providingfinancial assistance in the form of loan, which already haveencouraging responses.

The Bank is committed to continuous research and development soas to keep pace with modern banking.

The operations of the bank are computerized to ensure prompt andefficient services of the customers.

The Bank has introduced camera surveillance system to strengthenthe security services to the customers.

The Bank has introduced customer relation management system toassess the needs of the customers and resolve any problem on thespot.


9/41


Vision & Mission of the Bank Vision: To be the best Private Commercial

Bank in Bangladesh in terms of efficiency,capital adequacy, asset quality, sound

management and profitability having strongliquidity.

Mission: To build Prime Bank Limited into anefficient, market driven, customer focused

institution with good corporate governancestructure. Continuous improvement in itsbusiness policies, procedure and efficiencythrough integration of technology at all levels.


10/41


Performance appraisal system in

practice in the Prime Bank Limited


11/41


Traditional Appraisal System Traditional (Prior) Appraisal System is more

or less Annual Confidential Report(ACR). It isa performance evaluation report of employee

which is written by his superior. In addition toperformance it contains specific observationson the character, conduct and integrity of theofficer reported upon. This appraisal systemis to be countersigned by an officerimmediately superior to the officer who writesthe report on his immediate subordinate. Thereport is classified as confidential.


12/41


Traditional Performance

Appraisal System It contains traits and performance related factors. It is reported

that this system is mainly trait -based and thus neglects thereviews on direct job related dimensions. The factors are verymuch subjective in nature. The appraisal systems are applicable

to all employees irrespective of grades. However, forms aredifferent for different grades of employees.

The Traditional Performance Appraisal was filled upconfidentially. This non-communication keeps the employee indark about what is expected of them or where they stand.


13/41

1/27/2014Performance Appraisal System: ACase Study of Prime Bank Ltd. 13

Revised (Present) Appraisal System

Revised (Present) Appraisal System of

Prime Bank Ltd. is for managing,

evaluating and developing theperformance of the employee. It appliesto all executives (AVP to SEVP), officers

(All officers below AVP) and servicestaffs (Drivers).


14/41



Aim

The performance appraisal of Prime Bank Ltd. is just not allabout measuring performance of employees, but also aimsat development of performance in terms of skill andknowledge and leadership behavioural competenciesrequired in the job.

The Revised (Present) Appraisal System takes care ofthe following: Business performance (on the job accomplishment in terms

of a work plan) Depth of skill & knowledge Width of behavioural competencies Individual personal development plan


15/41



Objective The objective of the revised performance appraisal

system is to shape outstanding performance in acompetitive way to ensure sustainable profitablegrowth in business.

Length of appraisal The performance appraisal will conduct annually.

Key elements in the appraisal system There are three key elements included into the

new Performance Appraisal System.


16/41



Key Elements MarksPart-I: The individual Work plan/Targets 100

Part-II: Assessment of competency i.e., behavioural

leadership 100Part-III: Assessment of skill & knowledge level 100

Total Marks 300


17/41


18/41



Standard of performance measures

Excellent (EX) 255+Very Good (VG) 225+

Good+ (G+) 195+Good (G) 165+Fair (F) 135+

Modest (M/P) Below 135


19/41



Uses of Performance Appraisal System

Payment of incentive bonus.

Promotions Merit increment

Punishment


20/41



The employee

populations aftercompletion of

performance appraisal

Excellent (EX) =15%+-

Very Good (VG) =20%+-Good (G) =50%+-

Fair (F) =10%+-

Poor (P) =05%+-


21/41



15%+ - 50%+ - 20%+ - 15%

+ -

Very GoodExcellentPoor &Fair

GoodThe normal performance curve looks like this: (approximation)

Normal Distribution of

performance in an Organization


22/41


Revised (Present) Appraisal SystemExcellent

(EX) I ts means an outstanding & dynamic employee all the way i.e., Knows the job having full & updated knowledge & skills. Exceeds targets usually and meets job objectives consistently.

Capable of shouldering higher responsibilities.

Contributes new ideas, deeps commitment & manages time.

Demonstrates high integrity/ honesty

In a word, these employees are clearly excellent performance

exemplary

Very

good(VG)Definitely Superior to the standard expected of a competent,

experienced and acceptable employee. Such employee must have atleast 75%+ of the attributes / quality of a dynamic manager as

stated in Excellent grade

In a word, these employees are Clearly fully satisfactory

performance exceeding expectations.


23/41



Good

(G) A good all-around employee, well-suited to his/ her work and of thestandard expected. Potential may be limited, but, capable to move upthe ladder of higher responsibilities. Such employee mush have at

least 65%+of the attributes & qualities of a dynamic manager as

stated in the excellent grade. In a word, these employees are

Clearly standard performance meeting exception.Fair (F) Work isnot considered fully satisfactory owing to one or few

deficiencies or weakness in the standards of work, but, considered

acceptable but needs improvement & development. Such employee

must have at least 50%+ of the attributes & qualities a dynamic

manager as stated in theExcellent grade.Modest/

Poor (P) Work is purely unsatisfactory far below standard expected, necessaryto take a call for replacement.


24/41


Major differences between TraditionalPerformance Appraisal System and Revised(Present) Performance Appraisal System

Traditional Performance Appraisal

System

Revised (Present) Performance

Appraisal System

Traditional Performance AppraisalSystem is more or less Annual

Confidential Report

Revised (Present) PerformanceAppraisal System is just not all about

measuring performance of employees

but also aims at development of

performance in terms of skill &

knowledge and leadership competencies

required by the job.

This system is quite ineffective to find

out the skill gaps for the job.

This system helps in finding skill gaps to

be addressed for personal development.


25/41



Traditional Appraisal System

also not allows finding out the

competency gaps for the job.

Again the revised system helps in finding out

competency gaps to be addressed for personal

development.

The prior system is only stick

to performance appraisalwhich only occurred once a

year.

However, Revised Performance Appraisal System

helps in identifying high potential people indifferent grades as checked by globally and by

locations. For example, by this system HR can

know how many Excellent, Very Good, Good, fair

and modest employee a branch/department

possess. Again, this system ensures the HR toknow how many Excellent, Very Good, Good, fair

and modest employee each of the job grade

possess.


26/41



Traditional Appraisal System guarantee

only promotion for the employee in due

time.

But the revised system guarantee not

only promotion in due time but also

ensures bonus, incentives and special

promotion. For example, the Bank gave

special promotion to some of the

excellent grade employees in 2006.

Again in this system the amount of

annual bonus was not same for all

employees in 2006.


27/41


Findings & Analysis


28/41


Respondents Profile

Particulars Variables No. of Respondents % TotalUp to 30 years 7 46.67 15

Age Group 31-39 years 5 33.33More than 40 years 3 20.00

Education Graduate 3 20.00 15Post-Graduate 12 80.00

Sex Male 11 73.33 15Female 4 26.67

Above AVP-SEVP 2 13.33 15Position Principal Offi cer-FAVP 6 40.00

Trainee Assistant-Senior Off icer 6 40.00Service Staff 1 6.67Up to 2 years 4 26.67 15

Length of Service 2-5 years 5 33.33More than 5 years 6 40.00


29/41


Findings & Analysis

Traditional Performance AppraisalSystem:The participants of thequestionnaire do have good clarity aboutTraditional Performance Appraisal System

because they were used to this system for along time. But they viewed that this systemwas an ineffective tool for fairlyassessment of the appraisee.They viewedthat this System is acceptable but needsimprovement and development. Theobservation, in a word, reflects that

Traditional Performance Appraisal Systemis not an effective tool at all. Thisnecessitated the revision of the TraditionalPerformance Appraisal System.

Different appraisalforms of Revised(Present) PerformanceAppraisal System:Theobservation reflects thatthe employees of the bankare very satisfied with thedifferent appraisal forms.Because there are actually

three categories ofemployees and their jobnature is also different.


30/41


Findings & Analysis Acceptation of Revised

(Present) PerformanceAppraisal System:Thestudy shows that theacceptation of the newsystem is not that muchsatisfactory. The participantsinformed that a major portionof the employees werereluctant to accept the new

system. The observation alsosuggests that the employeesare not very sure about thesuccessful implementation ofthe new system.

Key elements of Revised (Present)Performance Appraisal System: It is foundfrom the data that both thesupervisor/appraiser and the appraisee do

possess little understanding about key

elements of the new system. Again therespondents reported that the employees ofthe bank have different ideas about the ratingscale.


31/41


Findings & Analysis

Performance measures ofRevised (Present) PerformanceAppraisal System: Theobservation suggests that except

few, employees are pleased withthe performance measures of thenew system. It is found that thedecision of only very good andexcellent holder employee willget promotion in due time is well-accepted by the competentemployees. But low performeremployees did not like thissystem.

Performance planning of Revised(Present) Performance AppraisalSystem: It is found from the data thatemployees do have very different viewsabout the performance planning of the

Revised System. The study suggests thatthe employees of the bank understandand agree what is expected from the job,

but not very sure about their position inconsistent of job description of the newsystem. Finally, respondents show theirsatisfaction about work plan of the new

system. They viewed that the newsystem helps in developing their

performance and preparing themselvesfor future career moves.


32/41


Findings & Analysis

Job Review of Revised (Present)Performance Appraisal System: Therespondents reveal very positive ideas about

job review of the Revised (Present)Performance Appraisal System. It is foundthat this revised system most importantlyfinds out the potential gaps and developmentopportunities of the employee of the Bank.The study finds that the orientation/trainingwhich the employees are getting now is

satisfactory. Except few, many of therespondents strongly believe that the feedbackfrom the supervisor/manager is satisfactory.

Formation of committees

in Revised (Present)

Performance Appraisal

System: It is found thatmost of the employees are

satisfied with the decision

of the committee though

few are not satisfied atcertain cases.


33/41


Findings & Analysis

Job Evaluation of Revised(Present) PerformanceAppraisal System: Therespondents state that

supervisor/appraiser is marginallyfair enough to diagnose exactlywhat the appraisee deserves. Otherthan few, many of the employeesagree with supervisor/managerabout appraising performance.The study also reveals that the

employees enjoyed much libertywhile preparing self appraisal,competency assessment and skill& knowledge assessment.

Success of Revised (Present)Performance AppraisalSystem: It is found from therespondents view that the

satisfaction level of theemployee for the Revised(Present) PerformanceAppraisal System is good. Theystate that in the Revised(Present) Appraisal System, fairassessment is possible. The

respondents are also satisfiedwith revised system whichhelps in their performance.


34/41


Recommendations Performance appraisal of a Bank is a

very crucial part both for themanagement and for the employees

because the successes and the failures ofthe employees largely depend on it. It

has been observed that some of theemployees do not possess muchknowledge about Revised (Present)Performance Appraisal System.Therefore, each and every employeeneeds adequate training on the revisedsystem. The HR should organize suchtraining at least once a year and shouldalso ensure feedback from theemployees that they have acquiredadequate knowledge on this.

The findings of the analysisreveal that employees havesome dissatisfaction in case of

promotion or continuation of

service. Therefore, within theorganization performanceshould be the basis foremployment references for

promotion of employees orcontinuation of service. Themanagement should establish it

through practice.


35/41

1/27/2014

Performance Appraisal System: A

Case Study of Prime Bank Ltd. 35

Recommendations Promotion or demotion,

training or attachment,transfer or posting,recruitment or selection,

salary fixation orincrement, there is nosingle area where

performance does notplay any role. Since theemployees do not have

adequate training on thesystem, managementshould organize trainingemphasizing on thiscomponent.

It is evident that performance management dealswith performance of an individual employee. Italso recommends training or attachment for the

poor-performer, which helps in developing theperformance of concerned employees. For notagreeing with its consequence means, the staffs

do not have adequate knowledge on theperformance management system and its fair andtransparent use. The management should lookinto these areas i.e. if any officer isrecommended for training he/ she should be sentfor training. Similarly, if anybody deserves

promotion for outstanding performance he/sheshould be given promotion or increment,whichever is applicable.


36/41

1/27/2014



Recommendations It is an important issue for both

the supervisor/appraiser and theappraisee. If they do not knowwhat is expected in the job then

the objectives of the organizationwill not be met. The training/

orientation on the performancemanagement system and theagreement on the job while

recorded in the job descriptionmust be ensured by thesupervisor/appraiser.

In most of the cases we findthat a good number of

respondents express theirmoderate agreement almost in

every area. I think we willagree on the issue that

moderate means 50:50possibilities in favor of the

concerned areas and also

against the areas. Therefore,the management should

consider their case as a weakarea and recommend training

for them.


37/41

1/27/2014



Recommendations

According to the policy, ifan employee is rated poorthen an improvement planmust be agreed between the

supervisor and the officer. Itseems that the exercise ofthis part of the performancemanagement system in not

being used properly. Themanagement should look

into this matter so that therecommendations of thesupervisor can beimplemented.

Right people for the rightjob and right people forpromotion is the areawhere Human ResourceDivision should look for.Though the bank is now ina stable position in the

banking arena, still HRshould give more

emphasis on this side tohave a steady and securedgrowth of the bank.


38/41

1/27/2014



Recommendations It is observed from the

respondents view that Revised(Present) Performance

Appraisal System finds the

potential gaps anddevelopment opportunities ofthe employees. Therefore thetask of the HR should provide

perfect training and othereducational opportunities forthe employee to have moreexpert and trained people.

It is found from the respondentsview that still there are some

areas where biases may occur.Thus biases should be reduced inthe performance appraisal systemas well as HR policy of the Bank.There should be a fair recruitmentsystem in order to get the cream

crop. The reason is that if the

employee will be better then it isfor sure that the performance

system will be better.


39/41

1/27/2014



Recent editionHuman Resources Division of Prime Bank Ltd. are now

thinking of different pay scale in each job grade. This system

is expected to implement very soon based on the

performance appraisal on the year 2006. Suppose there arethree persons in job grade Senior Officer. One person got

Excellent, another person got Good and the last person got

Poor in his performance appraisal form. Their pay scale will

be different based on the performance measures, he/she

possesses. Thus Revised (Present) Performance Appraisal

System will also take a major part to determine the pay

structure of the employees of Prime Bank Ltd.


40/41

1/27/2014



Conclusion

Although the Revised (Present) Performance AppraisalSystem, being used in the Prime Bank Limited, is found

effective, yet there are some disagreements and

dissatisfactions on some areas of the system, which we cancall system errors and can be overcome through trainingand orientation. If the management of the Bank is sincereenough to fully implement the system in the organization,

the performance as well as efficiency of the employees will

surely improve. The Prime Bank Limited can be a modelorganization for other banks, who are really interested to

implement the performance appraisal system in theirorganization.


41/41

/2 /20


C S d f i k d

Thanks for being patience

Documents

Presentation Zoinal