Performance Appraisal 2010 1 Anil Kumar Arora

Performance Appraisal 2010 Traditionally, performance appraisal was just limited to two main persons involved in the feedback process - namely the supervisor and the employee. The top-down approach, the usual performance appraisal jamboree in corporates, is conducted where the supervisor and the employee discuss one-to-one on broad swathe of issues pertaining to the latter's performance out comes. This traditional approach, involving supervisor and employee, is riddled with the problems of subjectivity, biases and halo effect. The traditional top-down approach predicated on single source of feedback (ie., supervisor) suffers on account of limited knowledge and inaccurate view of the not-so-competent supervisor. Many a time, supervisors also try to avert being on collision course with the sub-ordinates and may obscure the picture by giving inputs that may be entirely untrue. Since supervisors are far removed from the flow of work, they may find it tough to give feed back hinged on actual observation. Even if the supervisor intends to give a positive criticism he may still hold himself in the tracks for want of actual incident to buttress his opinion. Half the time an individual do no get a real picture and gain an actual glimpse into the kind of person one is. An employee's ability to identify core strengths and quelling weaknesses gets irredeemably impaired. The information asymmetry about our competencies, skills and performance related outcomes strait jackets the development, stultifies the growth and limits the perspectives. The Question that begs an answer is: is there a way forward? Is there a feed back approach where the inputs about an individuals performance can be sourced from multiple – levels? Will it be possible for the individual to get feed back about his/her managerial and behavioral dimension from multiple sources? The answer to all these questions are deafeningly loud and crystal clear - 360-degree feedback holds the key. In today's competitive environment, gathering information from all directions to assess one's standing has become an urgent imperative and compelling necessity. In addition to this, the corporate culture is on the cusp of profound evolution. There is an increased thrust on teamwork and delivering a world-class customer service. Employees development needs has become the byword among businesses. In a highly commoditised job market, companies are using every thing at the command to attract and retain the best talent. Businesses are helping employees to replenish their skills to stay relevant in the evolving times. Companies are looking to ways and means to optimize and measure employees and companies performance. The trajectory of these developments has shifted the focus from single – source feed back system to multiple – source feed back system. Performance appraisal, by providing a dynamic link to employee recruitment, selection, training and development, career planning, compensation and benefits, safety and health and industrial relations, is a vital tool for strategy execution. It signals to managers and employees what is really important; it fixes accountability for behaviour and results; and it helps to improve performance. This project will explain the knowledge about the performance appraisal. It can be used as a means of assessing potential for promotion, assisting people to perform better and indicating future training needs.

1 Anil Kumar Arora

Performance Appraisal 2010 This project will help in studying the purpose of performance appraisal. Performance appraisal is a management program, not just an HR department responsibility. It can help in development of scientific basis for reward allocation, wage fixation, incentives. It serves as a mechanism for communication between superiors and subordinates. • • •

This project will help in knowing the problems and hurdles faced by ineffective performance appraisal. This research work comprise of both primary as well as secondary data.Objective of the Study: This project aims at studying the system of performance appraisal and its effectiveness in an organization. Performance appraisal is the most significant and indispensable tool for the management as it provide useful information for decision making in area of promotion and compensation reviews.

Thus a broad objective of the study includes: • • •

To know the present system of performance appraisal To know the extent of effectiveness of the appraisal system To identify and know the area for improvement system

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The promotions rule though defined need to be communicated to every employee before appraisal process is done and also justify the promotion as a result of the appraisal. That the promotion policy followed differs at different position and category. Uniformity has to be there in the implementation of promotion policy at all levels. The process of performance appraisal followed in Dabur India Ltd. at the supervisory and above level IS to say not well but of satisfactory level. The employees do not rate it very good. The appraisal outcome has to be used frequently for the purpose of reward on performing well together with the feedback on the performance. Also when performance goes down employee has to be given feedback and motivated to do better. The organization at present doesn't lie career planning and career suggestion plans. In Dabur India Ltd. feedback is being provided to the employee though on a few occasion. Performance appraisal in Dabur India Ltd is done on an annual basis. More emphasis on training and job rotation as remedial measures. The mechanism of counseling pre-performance and post performance is not in practice at the organization in strict term. During the course of study suggestion came from the employee side for the need of counseling.

2 Anil Kumar Arora

Performance Appraisal 2010 Suggestions: •

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Training the Appraiser: It is proposed that appraiser be trained for clear understanding of the system and its objective and also counseled to be honest, fair, just, unbiased in appraising the appraisal. Factors/traits of evaluation: It is proposed that appraisal evaluated on above factors/traits be given suitable remark or justification for being given different quantitative grade. Greater clarity has to be has to there in terms of job responsibility. This is possible when the appraisal is done on the basis of the description. In the organization, performance appraisal is done on an annual basis which should be done Quarterly to make it more effective. Consistency is demanded in the promotional policy. It should not change every year. Monetary difference between two grades should not be large; it should be motivating in nature. Performance appraisal system should be made more transparent and rationale. Performance feedback: The performance feedback sessions should be improved which would results in increasing employee motivation to improve performance. The following could be incorporated. Pin point the problem behaviors and make sure the employee is aware of it. Make sure the employee understands the consequences of the problem behaviors. Get employee's commitment to change and make sure he cares about the change. Assistance should be provided to improve poor performance. Make a realistic plan appropriate to the behavior and set a time frame for improvement. To make sure to review performance time to time. The other change which has to be incorporated at the supervisor and the level above are: These should be listing down of task undertaken during the last one year and the result achieved. In some areas of performance there should be self appraisal and more and more counseling so that employee improves upon weak area and understands what is expected of him/her at the organization level. Based on the above an open appraisal system is suggested.

What is 360 degree feed back? 360-degree feedback has taken on the "buzz" status not only in corporate America but also in India. 360 degree feed back is being touted as a major organization change and leadership developmental tools in recent past. This sudden flurry of interest in 360degree approach can be ascribed to the current thinking among the corporate honchos that this feedback provides a more conducive environment for continuous learning and the inputs for employees to enhance their performance.

3 Anil Kumar Arora

Performance Appraisal 2010 According to a leading HR consultant, 40% of the American Companies used 360 degree feed back in 1995. This percentage is likely to surge to 65% in 2000. American society for training and development reviewed the training practices of more than 750 firms. Out of 750 firms, 55 firms relied heavily on 360 degree feed back for individual development plans and annual performance review. A recent study done in 2006 suggests that an over whelming 90% of fortune 500 companies have Joined the "360 degree feed back" bandwagon. Though 360 degree is hailed as the greatest leadership development tools by western countries, it is yet to make much headway in India. Indian corporates are tad bit slow off the block to embrace 360-degree appraisal system. The reasons are not far to seek. Indian business houses are markedly reluctant to embrace the system for fear of tinkering with traditional hierarchical structures. Nevertheless, top-notch companies like wipro, Infosys, Maruti are few of them who have gone 360 degree way and made success of it. 360 Performance is an extremely formalized process, where an individual or leaner or subject receives feedback from multiple individuals (also known as raters). The feedback provided by the multiple individuals fall in the remit of competencies, behavior and performance out comes. The raters, among others include individual boss, direct reports, colleagues, internal and external customers and suppliers. The subject will also carry out a self-assessment, which will be included in the appraisal. The rationale behind involving multiple individuals in the appraisal process 360 degree offers an unprecedented opportunity to the employees than the traditional top- down approach could ever offer, providing as it does, the feed back from the broad Swathe of people. The purpose of having multiple individuals in the appraisal process differ. Notwithstanding all the negatives associated with supervisor feed back, supervisor is well – poised to conduct a very comprehensive performance appraisal of the subject or an individual. Supervisor has a better understanding of the work requirements of the individual. He can also take a call on matters relating to any changes to be effected in the job requirements. Supervisor can also re-schedule and reallocate the individuals work as the situation warrants. On the flip side, excessive reliance on supervisors feed back is not advisable. Besides supervisor should be able to measure all the critical incident involved in employees job performance so as to make an dispassionate assessment. Supervisors need to be sensitized as to how to conduct this 3600 degree process. Many a time the performance appraisal system fall by the way side as the supervisor have no clue what so ever to conduct the appraisals. Secondly with traditional hierarchies giving way to flat and lean one, as well as the increased use of teams in the organizations, peer valuation has come to stay. Peers can provide a distinctive take on co-workers good performance or the lack of it for the reason that the behavior of co-workers will have a immediate bearing on the work environment. Besides employees may be amenable to idea of appraising each others performance.

4 Anil Kumar Arora

Performance Appraisal 2010 In this day and age, where the self - directed teams are gaining currency in the organizations, the role of peer appraisal has become the core of formal appraisal system. This is not to say that the peer appraisal is not with out its share of pitfalls. In a competitive milieu, peer ratings can raise tension levels and cause a bad blood amongst employees. Co-operation and mutual support will become a catastrophe. Any attempt to tie peer appraisal to pay or promotional decision can have disastrous consequences for the company. Thirdly sub-ordinates have a distinct perspective to offer in this appraisal exercise. A sub ordinate feedback can help the supervisor gain insights into employee needs and concerns A sub-ordinate feed back will also go a long way in assessing the supervisors interpersonal skills. Sub-ordinate feedback is not free from negatives. In the event of any sub-ordinate providing feedback about the superior, the whole exercise should be shrouded in anonymity. Fearing with-hunt and backlash sub-ordinates may prefer the line of least resistance and will give a dishonest feedback. If there are less than 5 subordinates in the rating pool, supervisor can really track the sub-ordinates down and go on the witch – hunting. The concept of sub-ordinates actually evaluating the performance is too frightening a concept for the supervisor. Supervisors may perceive it as an attempt to severely undermine their authority. The very fact that the sub-ordinates will be chipping away at their "authoritative silos" is bit tough to chew for the supervisors. Fourthly Customers will be happy to find their voice resonating in the appraisal process. The customer feed back can supplement the feedback provided by other constituents. On the flip side, customer feed back should be taken into consideration to evaluate group or organizational performance. The feedback should not be considered for evaluating individual performance outcomes. They have a limited understanding of the work processes and a policy frame works which places immense constraints on the employees. Customers, at best are well poised to evaluate the quality of products or services. Advantages of 360 degree feed back 360 degree feed back if, implemented properly will bestow many benefits up on the organization. •

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Feed back that emanates from various source, leaves little room for any discrimination or bias. In appraisal exercises. any discriminative slant of the supervisor can be nullified if the multi – source feedback shows that the supervisor input is not in conjunction with that of co-workers and customers and other constituents Feedback originating from multi sources can give a glimpse in to individuals performance improvement needs. Enhanced cohesion in the team, better communication and improved productivity levels are the positive fall out of implementing 360 degree feedback

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Performance Appraisal 2010 • • • • • • • •

Front line employees can hone their customer skills to near perfection owing to the feedback of the customers. This may enhance the customer service levels. Subordinates, derive enormous sense of importance and empowerment when asked to provide feedback about their superiors Decisions making percolates down to the lowest and lowest echelons of an organization, making it truly participative Fosters a very open culture where giving and receiving feedback is common place 360 degree helps the organization to zero in on and leverage the overall strengths. Increased focus on internal customer satisfaction Brings in more objectivity to the appraisal process and complements the traditional appraisal system 360 feedback is an effective tool for identifying development needs

360 degree can work wonders if it is properly implemented in organizations. For 360 degrees to work the organization climate should be supportive. In a wrong environment if 360 degree is implemented without providing training to the raters to enable them handle the process effectively, it can have a deleterious effect on the well-being of the organization. If 360 degree is tied to the strategic initiatives of the organization, it may have a winning process on their hands.

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