Project on PA JIMS

8/2/2019 Project on PA JIMS ..

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Acknowledgement

We have made this project report on performance appraisal

under the supervision and guidance of Mrs. Aditi maam. The

special thank goes to our helpful supervisor, Mrs Aditi Midha. The

supervision and support that she gave truly help the progression

and smoothness of the project we have made. The co-operation is

much indeed appreciated. Besides, this project report making

duration makes us realized the value of working together as a team

and as a new experience in working environment, which challenges

us every minute. The whole program really brought us together to

appreciate the true value of friendship and respect of each other.

Kannu Arora -64

Neetu Singh -72

Subrata Chakraborty-101

Ujjala Nijhawan-111

Pallavi Asthana-121


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INTRODUCTION

The history of performance appraisal is quite brief. Its roots in the early

20th century can be traced to Taylor's pioneering Time and Motion

studies. But this is not very helpful, for the same may be said about

almost everything in the field of modern human resources management.

As a distinct and formal management procedure used in the evaluation

of work performance, appraisal really dates from the time of the Second

World War not more than 60 years ago yet in a broader sense, the

practice of appraisal is a very ancient art. In the scale of things historical,it might well lay claim to being the world's second oldest, profession!

There is, says Dulwich (1989), "... a basic human tendency to make

judgements about those one is working with, as well as about oneself."

Appraisal, it seems, is both inevitable and universal. In the absence of a

carefully structured system of appraisal, people will tend to judge the

work performance of others, including subordinates, naturally, informally

and arbitrarily.

The human inclination to judge can create serious motivational, ethicaland legal problems in the workplace. Without a structured appraisalsystem, there is little chance of ensuring that the judgements made willbe lawful, fair defensible and accurate.

A performance appraisal, employee appraisal, performance review,or(career) development discussion is a method by which the jobperformance of an employee is evaluated (generally in terms of quality,quantity, cost, and time typically by the head orcorresponding manager. A performance appraisal is a part of guiding

and managing career development. It is the process of obtaining,analysing, and recording information about the relative worth of anemployee to the organization. Performance appraisal is an analysis ofan employee's recent successes and failures, personal strengths andweaknesses, and suitability for promotion or further training. It is also the judgement of an employee's performance in a job based onconsiderations other than productivity alone.


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The performance appraisal system


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Traditional Methods

1. ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as "Free Form

method"involves a description of the performance of an

employee by his superior. The description is an evaluation of

the performance of any individual based on the facts and often

includes examples and evidences to support the information. A

major drawback of the method is the inseparability of the biasof the evaluator.

2. STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of

performance appraisal. In this method, the appraiser ranks the

employees from the best to the poorest on the basis of their

overall performance. It is quite useful for a comparative

evaluation.

3. PAIRED COMPARISON

A better technique of comparison than the straight ranking

method, this method compares each employee with all others

in the group, one at a time. After all the comparisons on the

basis of the overall comparisons, the employees are given the

final rankings.

4. CHECKLIST METHOD

The rater is given a checklist of the descriptions of the behavior

of the employees on job. The checklist contains a list of

statements on the basis of which the rater describes the on the

job performance of the employees.


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5. CRITICAL INCIDENTS METHODS

In this method ofPerformance appraisal, the evaluator rates

the employee on the basis of critical events and how the

employee behaved during those incidents. It includes both

negative and positive points. The drawback of this method is

that the supervisor has to note down the critical incidents and

the employee behavior as and when they occur.

6. FIELD REVIEW

In this method, a senior member of the HR department or a

training officer discusses and interviews the supervisors to

evaluate and rate their respective subordinates. A major

drawback of this method is that it is a very time consuming

method. But this method helps to reduce the superiors

personal bias.

7. GRAPHIC RATING SCALE

In this method, an employees quality and quantity of work is

assessed in a graphic scale indicating different degrees of a

particular trait. The factors taken into consideration include

both the personal characteristics and characteristics related to

the on the job performance of the employees. For example a

trait like Job Knowledge may be judged on the range of

average, above average, outstanding or unsatisfactory.

8. FORCED DISTRIBUTION

To eliminate the element of bias from the raters ratings, the

evaluator is asked to distribute the employees in some fixed

categories of ratings like on a normal distribution curve. The

rater chooses the appropriate fit for the categories on his own

discretion.


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Modern methods

1.ASSESSMENT CENTRES -

An assessment centre typically involves the use of methodslike social/informal events, tests and exercises,assignments being given to a group of employees to assesstheir competencies to take higher responsibilities in the

future. Generally, employees are given an assignment

similar to the job they would be expected to perform ifpromoted. The trained evaluators observe and evaluateemployees as they perform the assigned jobs and are

evaluated on job related characteristics.The major competencies that are judged in assessment

centres are interpersonal skills, intellectualcapability, planning and organizing capabilities, motivation,career orientation etc. assessment centres are also an

effective way to determine the training anddevelopment needs of the targeted employees.

2.BEHAVIORALLY ANCHORED RATING SCALE..

Behaviourally Anchored Rating Scales (BARS) is a relatively

new technique which combines the graphic rating scale and

critical incidents method. It consists of predetermined critical

areas of job performance or sets of behavioural statements

describing important job performance qualities as good or bad

(for eg. the qualities like inter personal relationships,

adaptability and reliability, job knowledge etc.). These

statements are developed from critical incidents. In this

method, an employees actual job behaviour is judged against

the desired behaviour by recording and comparing the

behaviour with BARS. Developing and practicing BARS requires

expert.knowledge.


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3.HUMAN RESOURCE ACCOUNTING

METHOD........

Human resources are valuable assets for every organization.Human resource accounting method tries to find the relative

worth of these assets in the terms of money. In this method

the Performance appraisal of the employees is judged in terms

of cost and contribution of the employees. The cost of

employees include all the expenses incurred on them like their

compensation, recruitment and selection costs, induction and

training costs etc whereas their contribution includes the total

value added (in monetary terms). The difference between the

cost and the contribution will be the performance of the

employees. Ideally, the contribution of the employees should

be greater than the cost incurred on them.

4. 360 degree feedback, also known as'multi-rater

feedback', is the most comprehensive appraisal where thefeedback about the employees performance comes from allthe sources that come in contact with the employee on hisjob...

360 degree respondents for an employee can be his/herpeers, managers (i.e. superior), subordinates, team

members, customers, suppliers/ vendors -anyone who comes into contact with the employee and canprovide valuable insights and information regarding the "on-

the-job" performance of the. Employee.


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360 degree appraisal has four integral components:

self-appraisal gives a chance to the employee to look athis/her strengths and weaknesses, his achievements, and

judge his own performance. Superiors appraisal forms thetraditional part of the 360 degree performanceappraisal where the employees responsibilities and actual

performance is rated by superior.

Subordinates appraisal gives a chance to judge the employeeon the parameters like communication and motivating

abilities, superiors ability to delegate the work, leadershipqualities etc. Also known as internal customers, the correctfeedback given by peers can help to find employees abilities

to work in a team, co-operation and sensitivity towards others

Self-assessment is an indispensable part of 360 degreeappraisals and therefore 360 degree Performance

appraisal have high employee involvement and also have thestrongest impact on behaviour and performance. It provides a

"360-degree review" of the employees performance and is

considered to be one of the most credible performanceappraisal methods...

360 degree performance appraisal is also a powerfuldevelopmental tool because when conducted at regularintervals (say yearly) it helps to keep a track of the changes

others perceptions about the employees. A 360 degreeappraisal is generally found more suitable for the managers asit helps to assess their leadership and managing styles. This

technique is being effectively used across the globe forperformance appraisals. Some of the organizations following it

are Wipro, Infosys, and Reliance Industries etc.


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Self-assessment is an indispensable part of 360 degreeappraisals and therefore 360 degree Performance

appraisal have high employee involvement and also have the

strongest impact on behaviour and performance. It provides a

"360-degree review" of the employees performance and is

considered to be one of the most credible performance

appraisal methods.

360 degree performance appraisal is also a powerfuldevelopmental tool because when conducted at regular

intervals (say yearly) it helps to keep a track of the changes

others perceptions about the employees. A 360 degree

appraisal is generally found more suitable for the managers as

it helps to assess their leadership and managing styles. This

technique is being effectively used across the globe for

performance appraisals. Some of the organizations following it

are Wipro, Infosys, and Reliance Industries etc.


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One controversial issue

360 degree performance appraisal is said to be one of thebest techniques available to improve efficiency in the workplace. The method is put in place in order to make a good

analysis of the human potential of a company or work force.Human resources strategies are put into place that in turn

analyze performance as well as skills of the workers.

360 degree feedback on an employee s performance isconfidential and often starts with a questionnaire or self-

appraising. Self-assessment is seen as a reliable method bywhich an employee can be monitored. The results of thesetests are therefore available to the employer for each member

of his work force and for his general perusal.

There are controversies over using this method of appraisingco-workers and there are some very evident weak and strong

points on relying on such methods. Starting with a positive

issue, this kind of appraisal is good for identifying both thestrong and weak points of each and every member of staffindividually and it can be said to save a lot of time over other

methods as the appraisal is done by all workers, therefore

multiplying the results on an instant.

Another plus point for using this system is the wide range of

evaluation and techniques used. The individual methods chosenwithin a company are generally chosen by the humanresources department, but this can also be seen as a downside.

When the human resources department is left to choose thetopics and subjects for discussion, it can be done in a manner

that is too subjective, or even in one that will be unfair tocertain staff areas where it is the intention to show one group

in a better light than another.


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When there is however a large workforce to test, software

applications can indeed be used that will allow for fair testing

all-round. This method should not only be used if you have a

large and varied workforce; it is now preferred as the less

controversial and fair method and should replace an eitherbiased or inexperienced HR department.

Other controversy that surrounds 360 degree performanceappraisal is that it is heavily and unfairly biased towards largecompanies with large resources, and that it is totally unsuitablefor a small firm where there are only a handful of workers togive their opinion each other. However, one controversial issue

that is very real for any size of company when using such amethod is that there is a severe lack of objectivity. The methodis supposed to analyse with subjectivity and objectivity, but

this causes problems when workers have to analyse theirsubordinates. In fact, rivalry between workers can make thewhole process totally non-objective and this can lead to awhole stack of false findings and results.

In conclusion, the 360 degree performance appraisal is a

great way for all companies to track the performance of theworkers. A third party vendor can offer an unbiased and moreaccurate appraisal for analyzing key leadership positions within

an organization. This is especially true for the CEO position,the outside vendor can ensure transparency and accuracywhen handling the data. Often a customized 360 performanceappraisal can be a great tool for the CEO because it allows the

board of directors a clear unbiased analysis of the CEOs

performance.

Performance management (PM) includes activities thatensure that goals are consistently being met in an effective and

efficient manner. Performance management can focus on the

performance of an organization, a department, employee, or

even the processes to build a product or service, as well as

many other areas.


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THE APPRAISAL PROCESS

1. ESTABLISHING PERFORMANCE STANDARDS-

The first step in the process of performance appraisal is

the setting up of the standards which will be used to as thebase to compare the actual performance of the employees.

This step requires setting the criteria to judge the

performance of the employees as successful or

unsuccessful and the degrees of their contribution to the

organizational goals and objectives. The standards set

should be clear, easily understandable and in measurable

terms.

In case the performance of the employee cannot bemeasured, great care should be taken to describe thestandards.........

2. COMMUNICATING THE STANDARDS-------------------------

Once set, it is the responsibility of the management tocommunicate the standards to all the employees of theorganization. The employees should be informed and the

standards should be clearly explained to the. This will helpthem to understand their roles and to know what exactly isexpected from them. The standards should also be

communicated to the appraisers or the evaluators and ifrequired, the standards can also be modified at this stage

itself according to the relevant feedback from the employeesor the evaluators.


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3. MEASURING THE ACTUAL PERFORMANCE-----------------

The most difficult part of the Performance appraisal process

is measuring the actual performance of the employees thatis the work done by the employees during the specified

period of time. It is a continuous process which involvesmonitoring the performance throughout the year. This stagerequires the careful selection of the appropriate techniquesof measurement, taking care that personal bias does not

affect the outcome of the process and providing assistancerather than interfering in an employees work.

4. COMPARING THE ACTUAL WITH THE DESIREDPERFORMANCE-

The actual performance is compared with the desired or the

standard performance. The comparison tells the deviationsin the performance of the employees from the standards set.The result can show the actual performance being more than

the desired performance or, the actual performance beingless than the desired performance depicting a negativedeviation in the organizational performance. It includes

recalling, evaluating and analysis of data related to theemployees performance...

5. DISCUSSING RESULTS-----------------------------------

--------The result of the appraisal is communicated and discussed

with the employees on one-to-one basis. The focus of thisdiscussion is on communication and listening. The results,

the problems and the possible solutions are discussed withthe aim of problem solving and reaching consensus. Thefeedback should be given with a positive attitude as this canhave an effect on the employees future performance. Thepurpose of the meeting should be to solve the problemsfaced and motivate the employees to perform better.


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Need & purpose of appraisal

Performance Appraisal is being practiced in 90% of the

organizations worldwide. Self-appraisal and potential

appraisal also form a part of the performance appraisal

processes.

y To review the performance of the employees over a

given period of time

y To judge the gap between the actual and the desiredperformance.

y To help the management in exercising organizational

control.

y To diagnose the training and development needs of thefuture.

y Provide information to assist in the HR decisions likepromotions, transfers,etc.

y Provide clarity of the expectations and responsibilities ofthe functions to be performed by the employees.

y To judge the effectiveness of the other human resourcefunctions of the organization such as recruitment,selection, training and development.

y To reduce the grievances of the employees.


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According to a recent survey, the percentage oforganizations (out of the total organizations surveyed i.e.50) using performance appraisal for the various purposes are

as shown in the diagram-below:-:-.

The most significant reasons of using Performanceappraisal are:-

y Making payroll and compensation decisions 80%.

y Training and development needs 71%.

y Identifying the gaps in desired and actual performance

and its cause 76%.

y Deciding future goals and course of action 42%.

y Promotions, demotions and transfers 49%.

y Other purposes 6% (including job analysis and

providing superior support, assistance and counselling).


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Management by Objectives (MBO) is a process of agreeing

upon objectives within an organization so that management

and employees agree to the objectives and understand what

they are in the organization.

The term "management by objectives" was first popularized

by Peter Drucker in his 1954 book 'The Practice of

Management. The essence of MBO is participative goal setting,

choosing course of actions and decision making. An importantpart of the MBO is the measurement and the comparison of the

employees actual performance with the standards set. Ideally,

when employees themselves have been involved with the goal

setting and the choosing the course of action to be followed by

them, they are more likely to fulfill their responsibilities.

The essence of MBO is participative goal setting, choosing

course of actions and decision making. An important part of the

MBO is the measurement and the comparison of theemployees actual performance with the standards set. Ideally,

when employees themselves have been involved with the goal

setting and the choosing the course of action to be followed by

them, they are more likely to fulfil their responsibilities.


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THE MBO PROCESS


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UNIQUE FEATURES AND ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) is tocreate empowered employees who have clarity of the roles andresponsibilities expected from them, understand theirobjectives to be achieved and thus help in the achievement of

organizational as well as personal goals..

Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART

goals i.e. goals that are:---------------------------------

Specific, Measurable, Achievable, Realistic, and Timebound. The goals thus set are clear, motivating and thereis a linkage between organizational goals and

performance targets of the employees.

The focus is on future rather than on past. Goals andstandards are set for the performance for the future with

periodic reviews and feedback.

Motivation Involving employees in the whole processof goal setting and increasing employee empowermentincreases employee job satisfaction and commitment.

Better communication and Coordination Frequentreviews and interactions between superiors and

subordinates helps to maintain harmonious relationshipswithin the enterprise and also solve many problems faced

during the period.


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Limitations

1. It over-emphasizes the setting of goals over the working of

a plan as a driver of outcomes.

2. It underemphasizes the importance of the environment or

context in which the goals are set in .In1991 comprehensive

review of thirty years of research on the impact of Management

by Objectives, Robert Rodgers and John Hunter concluded that

companies whose CEOs demonstrated high commitment to

MBO showed, on average, a 56% gain in productivity.

Companies with CEOs who showed low commitment only saw a

6% gain in productivity.

3. It did not address the importance of successfully responding

to obstacles and constraints as essential to reaching a goal.

The model didnt adequately cope with the obstacles of:

Defects in resources, planning and methodology,

The increasing burden of managing the information

organization challenge,

The impact of a rapidly changing environment, which could

alter the landscape enough to make yesterdays goals and

action plans irrelevant to the present.


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APPRAISAL SYSTEMS OF FEW COMPAANIES IN INDIA

1.ONGC

With a view to bringing about a performance driven culture

within the organization, ONGC has an annual objective oriented

performance appraisal system, which is implemented uniformly

across the Organization.

The appraisal system used in ONGC is the oldest one. It is a

three tier system where an employee is evaluated in three

stages by the Reporting Officer under whom employee is

working.

By the Reviewing Officer.

By the accepting officer

Self-appraisal is also there.


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2. NRL

The appraisal system implemented in NRL is CR.

At first KPI s are fixed, Then each employee is appraised by his

DMGR.Here employees are appraised only by the superiors.

But very soon the appraisal system of NRL is supposed to be

changed from CR to 360 degree appraisal.

3.IOC, 4.HPCL 5.BPCL 6.NTPC

The PMS used by M/s IOC, HPCL, SAP are IT enabled.

PMS in BPCL ad NTPC are paper based.

M/s IOC follows a no pen no paper approach only forexecutives.

At IOC and at HPCL, the IT enablement has been achieved

using separate servers with offline linkages to HR Master data.

The package used is customer specific with in house

consultants support.

At IOC, the database used is Oracle and Java is the

programming language, package developed by third party

solution provider. In absence of ERP payroll, the performance

based incentives are paid by extracting information from data

base.


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7.DABUR INDIA LIMITED

In Dabur India Limited they have the system of performance

appraisal of their employees.

The main objective of this performance appraisal system is to

evaluate the performance, promote their employees and to

arrange for their various training programs if they require for

enhancing their skills in their respective areas and in

contribution enhancement.

Employees are evaluated by how well they accomplish a

specific set of objectives that have been determined to be

critical in the successful completion of their job. This approach

is frequently referred to as management by objectives.

8. MARUTI UDYOG

The company has introduced a unique 360-degree feedback

system, starting with its senior leadership from the year 2007.

It is for the top management such as chief general managers

and general managers, whose performance is assessed based

on feedback from their peers and junior management

employees within the same department.

Till the year 2006, their performance was being appraised only

by the Directors and the


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Components of a Good Appraisal System

y

Prior to discussing the advantages of a performanceevaluation system, a format for one needs to be

established. A good performance appraisal consists ofthree components: Expectations, Feedback and

Development.

Expectations: This includes the job description, goals,training and behaviors expected from the employees. For

example, the job description might include the expectedwork hours and the daily, weekly and monthly duties ofthe position. The goals talk about what the employee is

expected to produce: 30 pieces a day with a 99%accuracy ratio, for instance. Training includes what the

employee needs to do to keep current with his position.Maybe he needs to learn advanced Excel or take some on-

the-job monthly technical classes to maintain his skills.Finally, behavioral measurement includes how the

employee adapts when situations change, or how he getsalong with coworkers.

Feedback: This speaks to what sources will be used

to measure performance. Weekly computer-generatedproduction and quality reports or attendance records are

examples. Observation can be another valid measurementtool. Feedback from other areas may also be solicited. Forexample, it's not uncommon for workers from other

departments to provide feedback where appropriate. Infact, performance reviews called 360's extend thefeedback to managers, peers, different departments,

customers and the employee himself. This provides a

complete feedback circle. For feedback to be effective, itmust be immediate. Telling an employee in a yearlyreview for the first time about something that happened

at the start of the review period may not be rememberedby the employee. It's simply not fair. So, feedback needsto be given as soon as possible after situations that will be

commented upon occurred.


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Development Plan: This is where all the feedback leads

to--further developing the employee in each departmentto be competent in current roles and to aspire to more

beyond that. A development plan needs to be agreedupon by the supervisor and the employee to make the

performance process complete. Ongoing consistency is thekey to a good performance evaluation administrationsystem.

Performance Appraisal System Advantages

A good performance appraisal system provides the followingfive advantages for the employee, supervisor and company:-Compensation and Rewards: A well-administered programgives credibility to assigning the proper salary increases andbonuses to employees. It allows the supervisor to reward the

right employees and the company to budget properly.- Performers: Just as important as rewarding good work, aplatform exists to deal with employees who need

improvement. The documentation sets the stage for

performance improvement plans and any other actions thatmay,follow.- Good Morale: If employees can count on the fact they willreceive thoughtful, consistent and ongoing performance

evaluations, morale improves; productivity increases.- Documentation: These valuable records can be used in anylegal proceedings to explain why certain actions were taken.They're also proof that company policies and employee and

company rights have been adhered to.- It's the Right Thing to Do: This may sound trite but

companies have an inherent responsibility to be fair to theiremployees about their performance. A well-constructedperformance evaluation program, administered fairly by

trained supervisors and managers, is the best thing acompany can do for itself, and for its entire people.


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Drawbacks ofPerformance Appraisal

In its most basic form, a performance appraisal is anevaluation and feedback process. It is a report card on an

employee's performance for the previous year. It was firstintroduced in 1911 by Fredrick Taylor as part of his scientificmanagement model of business. In Taylor's model, pay was

directly tied to productivity. If employees exceededmanagement expectations, their pay was increased. If they

failed to meet expectations, their pay was cut. Since that

time, the concept of the performance appraisal has evolved.Ideally, performance appraisals are used to identify trainingneeds, reward performance, motivate employees, document

performance to identify candidates for layoff or promotion,support the company's strategic objectives, etc.

Time Requirement

Effective performance appraisals are not just an annualevent. Managers must monitor and documentperformance for each employee throughout the year.

Documentation must include both problems andsuccesses. In addition, the manager must write theevaluation report, meet with the employee to discuss it

and take follow-up actions as necessary, such as settingperformance goals for the next year. If a manager has

many employees, the process can take a great deal of

time.


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Negative Impact on Employees

y If not done properly, performance appraisals can haveadverse results. For example, if a manager does not keep

notes on employee performance throughout the year, theprocess focuses on work done in the weeks leading up to

the appraisal. So, accomplishments or problems fromearlier in the year are not reflected in the evaluation.

In addition, some managers focus only on the negative or

positive aspects of an employee's performance. In other

instances, everyone in the department receives the samerating so that the appraisal is meaningless. Rather than

motivating employees to improve their performance, suchappraisals can discourage them from trying and reduce

productivity.

ManagerPerceptions

Performance appraisals are based on managers'perceptions and experience and, as such, are subject torater error. Personal bias and experience can influencerating decisions. According to Florida State University

researcher James Bowman, managers may makecompatibility errors by rating employees who are "similar

to me" higher than those who are not.

Managers may also be subject to spillover -- the halo or

black mark effect. In this type of error, because anemployee does one thing exceptionally well or poorly, themanager rates the employee's overall performance as

exceptionally good or bad.


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Subjective or Objective Measures

Frequently, performance appraisals focus on subjectiveskills such as customer service or problem solving, whichare difficult to measure and are subject to rater error. This

happens because the appraisal is not linked to a current,accurate job description and no measurable performance

goals were set at the previous year's performance review.

For example, a call center manager may tell employees toreduce the number of dropped calls. In this case, there isnot definition of what the manager means by reduce thenumber. A reduction of three dropped calls a month is areduction but may not be what the manager had in mind.

Whereas, instructing call center employees that they mostreduce the dropped call rate to less than 1 percent a

month is a goal that can be easily tracked and measured

by most call center telephone systems and givesemployees a specific performance standard to meet.


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Performance Standards

How does the Team Leader decide what's acceptable andwhat's unacceptable performance? The answer to this question

is the first step in establishing written standards.

Performance expectations are the basis for appraisingemployee performance. Written performance standards let theTeam Leader to compare the employee's performance with

mutually understood expectations and minimize ambiguity inproviding feedback. Having performance standards is not a newconcept; standards exist whether or not theyare discussed or put in writing. When the Team Leaderobserves an employee's performance, he usually makes ajudgment about whether that performance is acceptable.

Standards identify a baseline for measuring performance. From

performance standards, the Team Leader can provide specificfeedback describing the gap between expected and actualperformance.


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Characteristics of Performance Standards

Standards describe the conditions that must exist before theperformance can be rated satisfactory. A performance standardshould:-

y Be realistic, in other words, attainable by any qualified,

competent, and fully trained person who has the authorityand resources to achieve the desired result.

y Describe the conditions that exist when performance

meets expectations.y Be expressed in terms of quantity, quality, time, cost,

effect, manner of performance, or method of doing.y Be measurable, with specified method(s) of gathering

performance data and measuring performance against

standards.


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Expressing Standards

The terms for expressing performance standards are outlined below:

Quantity: Specifies how much work must be completed withina certain period of time.

Quality: Describes how well the work must be accomplished.Specifies accuracy, precision, appearance, or effectiveness.

Timeliness: Answers the questions, by when? , How soon? ,

Or within what period?

Effective Use of Resources: Used when performance can beassessed in terms of utilization of resources: money saved,

waste reduced.

Effects of Effort: Addresses the ultimate effect to be

obtained; expands statements of effectiveness by usingphrases such as: so that, in order to, or as shown by.

Manner of Performance: Describes conditions in which anindividual's personal behaviour has an effect on performance,

e.g., assists other employees in the work unit in accomplishingassignments.

Method of Performing Assignments: Describes

requirements; used when only the officially prescribed policy,procedure, or rule for accomplishing the work is acceptable.


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The following are the suggestions and conclusions derived from this

particular:-

Objectivity of the manager and he must ensure One manager'sidea of "self-starting ability" can be quite different than

another's idea. The question then arises as to how oneobjectively evaluates "creativity? If greater amount ofobjectivity can be infused into the Appraisal system, it can helpto bring more transparency.

Effective Communication

One function of performance appraisals is to help employeesdevelop so they can contribute more effectively. In order for

the employees to develop and learn they need to know whatthey need to change, where (specifically) they have fallenshort, and what they need to do. If a manager assigns a 1

(unsatisfactory) on a scale of 5, it does not convey muchinformation to an employee. It just says the manager isdissatisfied with something. In order to make it meaningful andpromote growth, far more information must be added to the

appraisal process and the related information should betransparently shared with the employee . Fairness Mostemployees resist being classified at the low end of the scale.

Employees who are low rated are more likely to resist theevaluation of the superior and argue, claiming that personal

bias was involved in the ratings.

Managerial Efficiency

The implementation of a Performance Appraisal System rests

on the shoulders that it is done properly. A good manager canmake an average appraisal system work and vice-versa.


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Case study

Case study on new performance appraisal system at xerox Document Transcript

Case Study on New Performance Appraisal System at

Xerox, In the mid-1980s Xerox corporation was faced with

a problemits performance appraisal system was not

working. Rather than motivating the employees, its

system was leaving them discouraged and disgruntled.

Xerox recognized this problem and developed a new

system to eliminate it.

Old Performance Appraisal System. The original system

used by Xerox encompassed seven main principles:

The appraisal occurred once a year. It required employees

to document their accomplishments.

The manager would assess these accomplishments in

writing and assign numerical ratings.

The appraisal included a summary written appraisal and arating from 1 (unsatisfactory) to 5 (exceptional).

The ratings were on a forced distribution, controlled at the

3 level or below.

Merit increases were tied to the summary rating level.

Merit increase information and performance appraisals

occurred in one session.

This system resulted in inequitable ratings and was cited

by employees as a major source of dissatisfaction.In fact, in 1983, the Reprographic Business Group (RBG),

Xeroxs main copier division, reported that 95 percent of

its employees received either a 3 or 4 on their appraisal.

Merit raises for people in these two groups only varied by


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1 to 2 percent. Essentially, across-the-board raises were

being given to all employees, regardless of performance.

New Performance Appraisal System

Rather than attempting to fix the old appraisal system,

Xerox formed a task force to create a new system fromscratch. The task force itself was made up of senior

human resources executives; however, members of the

task force also consulted with councils of employees and a

council of middle managers. Together they created a new

system, which differed form the old one in many key

respects:

The absence of a numerical rating system.

The presence of a half-year feedback session.

The provision for development planning.

Prohibition in the appraisal guidelines of the use of

subjective assessments of performance.

The new system has three stages, as opposed to the one-

step process of the old system. These stages are spread

out over the course of the year.

The first stage occurs at the beginning of the year when

the manager meets with each employee. Together, they

work out a written agreement on the employees goals,

objectives, plans, and tasks for the year. Standards of

satisfactory performance are explicitly spelled out in

measurable, attainable, and specific terms.

The second stage is a mid-year, mandatory feedback and

discussion session between the manager and the

employee. Progress toward objectives and performance

strengths and weaknesses are discussed, as well as

possible means for improving performance in the latterhalf of the year. Both the manager and the employee sign

an objectives sheet indicating that the meeting took

place.

The third stage in the appraisal process is the formal

performance review, which takes place at years end. Both


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the manager and the employee prepare a written

document, stating how well the employee met the preset

performance targets. They then meet and discuss the

performance of the employee, resolving any discrepancies

between the perceptions of the manager and theemployee. This meeting emphasizes feedback and

improvement. Efforts are made to stress the positive

aspects of the employees performance as well as the

negative. This stage also includes a developmental

planning session in which training, education, or

development experiences that can help the employee are

discussed. The merit increase discussion takes place in a

separate meeting from the performance appraisal, usually

a month or two later. The discussion usually centers on

the specific reasons for the merit raise amount, such as

performance, relationship with peers, and position in

salary range. This allows the employee to better see the

reasons behind the salary increase amount, as opposed to

the summary rank, which tells the employee very little.

A follow-up survey was conducted the year after the

implementation of the new appraisal system. Results were

as follows:

81 percent better understood work group objectives84

percent considered the new appraisal fair72 percent said

they understood how their merit raise was determined70

percent met their personal and work objectives77 percent

considered the system a step in the right direction In

conclusion, it can be clearly seen that the new system is a

vast improvement over the previous one. Despite the fact

that some of the philosophies, such as the use of self-appraisals, run counter to conventional management

practices, the results speak for themselves.

Questions: What type of performance appraisal is central

to new system at Xerox? Which, if any, of the criteria for a

successful appraisal does this new system have?


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Given the emphasis on employee development, what

implications does this have for hiring and promotions?

How do you think, management feels about the new

performance appraisal system? Why?Are there any

potential negative aspects of the new performanceappraisal system?

2ND GAME

A Sweet Employee Performance Appraisal System for Jelly Belly

Candy making is a fun business, and so it's no surprise that it's

fun to work at the Jelly Belly Candy Company of Fairfield,California. But at this family-owned company, there's no fooling

around when it comes to promoting employee performance and

job satisfaction. So when Jelly Belly decided to overhaul and

automate its antiquated employee performance and talent

management process, it was looking for a serious solution to

help give its employees across the United States fair, accurate

performance appraisals.

The Jelly Belly Candy Company makes Jelly Belly brand jellybeans in over 50 flavors, as well as candy corn and other

treats. Introduced in 1976 and named by former U.S. president

Ronald Reagan as his favorite candy, the company's jelly beans

are exported worldwide. Herman Goelitz Candy was founded in

1869 by Albert and Gustav Goelitz, whose great-grandsons

own and run Jelly Belly today.

Like almost every smart company, Jelly Belly recognizes that

employees are more likely to stay with their employer whenthey feel connected and recognized for their efforts. Evaluation

and performance management programs are critical to aligning

corporate and employee values and priorities.


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Challenge

Jelly Belly's search for a new employee performance and talent

management system began several years ago, when two

branches of the family business were reunited into a single

company. One branch was using an outdated EPM software

program. The other was doing its employee performance

appraisals manually, using paper forms.

Having a variety of jelly bean flavors is great - a variety of

employee appraisal processes in a single company is not. The

task of updating and consolidating the performance

management process fell to Margie Poulos, HR Manager of Jelly

Belly's Midwest operations. She and a small team of Jelly Belly

HR staff were charged with finding a single automated system

that could be used for all of Jelly Belly's 600 employees in three

locations.

The driving factor behind Jelly Belly's performance

management automation was the belief that thorough,

accurate reviews help employees to better understand what's

expected of them, so that they can set clear, measurable

objectives. That translates into higher employee satisfaction,

said Jeff Brown, Jelly Belly's Director of Human Resources.

"When employees feel they have gotten a thorough and

accurate review, it boosts their morale," Brown said. It also

leads to improved talent management and employee retention,

which management experts know is a key factor in corporate

growth and market leadership.

Solution


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To meet their strategic goals, Poulos and her team drew up a

list of the criteria that a new system had to meet. Top on the

list was ease of use. "We didn't want to end up with a system

that is so complicated that the managers wouldn't use it,"

Poulos said. A new system also had to save time. Becauseemployees were in multiple locations, it needed to be web-

based for accessibility. And it had to be flexible, easily

incorporating core competencies into different forms.

Jelly Belly's selection committee looked at products from

different software vendors. "We eliminated right away those

that were geared to very large companies and those that were

not web-based," Poulos said. "We also eliminated those that

offered too many options for customization. It's one thing to

offer options, but another thing when the product requires so

much customization that it becomes overwhelming."

The committee selected Halogen eAppraisal, a web-based

employee performance and talent management application

from Halogen Software. "We liked the way it looked, and we

really liked the user-friendliness of it. It's easy for the

managers to use and it's customizable without overwhelming

them," Poulos said. After two days of training by Halogen staff,

four members of Jelly Belly's HR team set out to train the

company's supervisors on the new system. About 50 managers

received a crash course in using Halogen eAppraisal, and then

used it to complete annual employee evaluations in May. Jelly

Belly's HR team is now customizing the software to includemore relevant competencies and to respond to comments from

managers and staff on the new system.


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"The feedback has been really positive, from both managers

and employees as well. Some staff said this was the best

appraisal they've had," Poulos said, "They felt the evaluations

were fair and realistic, and supervisors had the scope to

provide more relevant and legitimate comments than theycould before. Rather than just clicking on a bunch of canned

comments, they were accurately reviewing the employee."

Results

The new automated employee performance appraisal systemhas completely formalized and organized Jelly Belly's employee

evaluation process. "It allows us to standardize competencies

across job classifications, add signature and comment sections

to make our process more interactive, and increase

accessibility for remote managers," Brown said.

Under Jelly Belly's old system, employees conducting reviews

started from scratch once a year with new performance

journals. Halogen eAppraisal will let them log notes throughout

the year and regularly update their on-line appraisals.

Employees use one consistent employee evaluation form to add

comments and to sign their appraisals.

The web-based product helps remote and traveling managers

maintain access to the forms and the data they need toevaluate their staff. "In our old system, a few folks in Chicago

would have access to the system. But we have managers in

California with Chicago subordinates. It's important that they

can share the same forms across the board. And we have folks

who are on the road a lot or are working out of home offices,


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so having them be able to access this is a huge point for us,"

Brown explained.

Organizing and automating the appraisal process results inperformance appraisals that are more accurate and fair, Brown

noted. "This is important because, after all, an employee

appraisal is a legal document," he said.

The new system is also helping Jelly Belly track training

requirements and development in its staff, Paulos added.

"We've always had a separate training manual. Now we can goin to the evaluations and more easily monitor employees' skills

development, see what training is needed by individuals and

check the due dates for training and renewal. That makes it

much easier for us to keep track," Paulus noted.

The new employee performance and talent management

system has proven to be a big time-saver for Jelly Belly's HR

team. "Since this year was the first time using the new system,

it took us a little longer than it will next year. But the process

was a whole lot faster," Paulus said. "It has already saved us a

lot of time, and we got everybody's appraisals done in one

shot." The new system is also helping Jelly Belly to better align

employee goals with the company's business objectives. And

for one of America's best-known candy companies, it doesn't

get any sweeter than that.

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