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TABLE OF CONTENTS
VIVEKANANDA DEGREE COLLEGE Page 1
PARTICULARS PAGE NUMBER
Introduction
Performance Management System
Review Of Literature
Introduction
Statement of problem
Objectives
Methodology
Profile Of ABB
Performance Management At ABB
Data Analysis & Discussions
Findin s
Su estion & Conclusion
APPENDIX
( Questionnaire and selected bibliography)
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VIVEKANANDA DEGREE COLLEGE Page 2
LIST OF TABLE AND GRAPHS
PARTICULARS
PAGE
NO.OF
TABLE FIGURE NO.
Goal-Setting was done within 30 da s of Joining
Responses of employees as to whether their mid year reviewhas been conducted
Responses of employees as to whether their annualerformance review was conducted
Responses of employees as to opportunity to bring out issues
durin the review sessionResponses of employees whether their manager was receptiveduring the review session
Responses of employees as to whether all their issues wereaddressed or lanned to be addressed
Responses as to whether the discussion helped in improvingthe erformance
Responses of employees whether their relationship with theirmana er im roved after the discussion
Responses of employees to the extent of role clarity after thediscussion
Responses of employees whether there was progress on thelast review discussion
Responses of employees whether they worked under twomana ers durin the a raisal eriod
Responses of employees who worked under two managers asto whether it affected their a raisal ratin
Responses of employees whether they perceived fairness in
erformance evaluation
Responses of employees as to the level of satisfaction withrespect to the Performance Evaluation system
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Introduction
1.1 Performance Management System Overview
Performance Management is a fairly imprecise term, and performance management processes
manifest themselves in many different forms. There is no one right way of managing performance:
the approach must depend on the context of the organization-its culture, structure, technology-the
views of stakeholders and the type of people involved.
Performance management is a strategic and integrated approach ton delivering sustained success to
organization by improving the performance of the people who work in them and by developing thecapabilities of teams and individual contributors. Performance management is:
Strategic in the sense that it is concerned with the broader issues facing the business if it is to
function effectively in its environment and with the general direction in which it intends to go to
achieve longer-term goals.
Integratedin four senses:
1. vertical integration- aligning business, team and individual objectives
2. functional integration- linking functional strategies in different parts of the business
3. human resource (HR) integration- linking different aspects of HRM, especially
organizational development and HR development and reward, to achieve a coherent approach to the
management and development of people
4. the integration of individual needs with those of the organization, as far as this is possible.
Concerned with performance improvement in order to achieve organizational, team and individual
effectiveness. Organizations, as stated by Lawson (1995), have to get the right things done
successfully. Performance is not only about what is achieved but also about how it is achieved.
Management is involved in direction, measurement and control. But these are not the exclusive
concern ofmanagers: teams and individuals jointly participate as stakeholders.
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Concerned with development, this is perhaps the most important function of performance
management. Performance improvement is not achievable unless there are effective processes of
continuous development. This addresses the core competencies of the organization and the capabilities
of individual and teams.
According to Fletcher (1993a),the real concept of performance management is associated with
an approach to creating a shared vision of the purpose and aims of the organization, helping each
employee understand and recognize their part in contributing to them, and in so doing, manage
and enhance the performance of both individual and the organization.
1.2 A short history of Performance Management
No one knows precisely when formal methods of reviewing performance were first introduced. The
first formal monitoring systems, however, evolved out of the work of Fredrick Taylor and his
followers before World War I. Merit-rating came to the fore in the USA and the UK in the 1950s and
1960s, when it was sometimes rechristened performance appraisal. Management by Objectives then
came and went in the 1960s and 1970s and, simultaneously, experiments were made with the
critical incident technique and behaviorally anchored rating scales. A revised form of result-oriented
performance appraisal emerged in the 1970s, which still exists today. The term
performance management was first used in the 1970s, but it did not become recognized
process until the latter half of the 1980s.
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 resource 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.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was
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used to decide whether or not the salary or wage of an individual employee was justified.
The process was firmly linked to material outcomes. If an employee's performance was found to be
less than ideal, a cut in pay would follow. On the other hand, if their performance was better than thesupervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a
cut in pay, or a rise, should provide the only required impetus for an employee to either improve or
continue to perform well.
Sometimes this basic system succeeded in getting the results that were intended; but more often thannot, it failed.
For example, early motivational researchers were aware that different people with roughly equal
work abilities could be paid the same amount of money and yet have quite different levels of
motivation and performance.
These observations were confirmed in empirical studies. Pay rates were important, yes; but they were
not the only element that had an impact on employee performance. It was found that other issues, such
as morale and self-esteem, could also have a
major influence.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in
the United States, the potential usefulness of appraisal as tool for motivation and development was
gradually recognized. The general model of performance appraisal, as it is known today, began from
that time
1.2.1 Modern Appraisal
Performance appraisal may be defined as a structured formal interaction between a subordinate and
supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the
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work performance of the subordinate is examined and discussed, with a view to identifying
weaknesses and strengths as well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or indirectly, tohelp determine reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay increases, bonuses, and
promotions
By the same token, appraisal results are used to identify the poorer performers who may require some
form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need
to be aware of laws in their country that might restrict their capacity to dismiss employees ordecrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment and justification
of rewards and penalties - is a very uncertain and contentious matter.
1.2.2 Appraisal MethodsEssay Method
In the essay method approach, the appraiser prepares a written statement about the employee being
appraised. The statement usually concentrates on describing specific strengths and weaknesses in job
performance. It also suggests courses of action to remedy the identified problem areas. The statement
may be written and edited by the appraise alone, or it be composed in collaboration with the appraisee.
Advantages
The essay method is far less structured and confining than the rating scale method. It permits the
appraiser to examine almost any relevant issue or attribute of performance. This contrasts sharply
with methods where the appraisal criteria are rigidly defined.
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Appraisers may place whatever degree of emphasis on issues or attributes that they feel appropriate.
Thus the process is open-ended and very flexible. The appraiser is not locked
into an appraisal system the limits expression or assumes that employee traits can be neatly
dissected and scaled.
Disadvantages
Essay methods are time-consuming and difficult to administer. Appraisers often find the essay
technique more demanding than methods such as rating scales.
The techniques greatest advantage - freedom of expression - is also its greatest handicap. The varying
writing skills of appraisers can upset and distort the whole process. The process is subjective and,
in consequence, it is difficult to compare and contrast the results of individuals or to draw any broad
conclusions about organizational needs.
Results Method
Management By Objectives (MBO)
The use of management objectives was first widely advocated in the 1950s by the noted management
theorist Peter Drucker.
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MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they
seek to measure employee performance by examining the extent to which predetermined work
objectives have been met.
Usually the objectives are established jointly by the supervisor and subordinate. An example of an
objective for a sales manager might be: Increase the gross monthly sales
volume to $250,000 by 30 June.
Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills
needed to achieve the objective. Typically they do not rely on others to locate and specify their
strengths and weaknesses. They are expected to monitor their own development and progress.
Advantages
The MBO approach overcomes some of the problems that arise as a result of assuming that the
employee traits needed for job success can be reliably identified and measured.
Instead of assuming traits, the MBO method concentrates on actual outcomes.
If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable
level of job performance. Employees are judged according to real outcomes, and not on their
potential for success, or on someone's subjective opinion of their abilities.
The guiding principle of the MBO approach is that direct results can be observed, whereas the
traits and attributes of employees (which may or may not contribute to performance) must be
guessed at or inferred.
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The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.
MBO advocates claim that the performance of employees cannot be broken up into so many constituent
parts - as one might take apart an engine to study it. But put all the parts together and the performance
may be directly observed and measured
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Disadvantages
MBO methods of performance appraisal can give employees a satisfying sense of
autonomy and achievement. But on the downside, they can lead to unrealistic
expectations about what can and cannot be reasonably accomplished.
Supervisors and subordinates must have very good "reality checking" skills to use MBO
appraisal methods. They will need these skills during the initial stage of objective setting, and
for the purposes of self-auditing and self-monitoring.
Unfortunately, research studies have shown repeatedly that human beings tend to lack the skills
needed to do their own "reality checking". Nor are these skills easily conveyed by training.
Reality itself is an intensely personal experience, prone to all forms of perceptual bias.
One of the strengths of the MBO method is the clarity of purpose that flows from a set of well-
articulated objectives. But this can be a source of weakness also. It has become very apparent
that the modern organization must be flexible to survive. Objectives, by their very nature, tend
to impose certain rigidity.
Of course, the obvious answer is to make the objectives more fluid and yielding. But the
penalty for fluidity is loss of clarity. Variable objectives may cause employee confusion. It is
also possible that fluid objectives may be distorted to disguise or justify failures in
performance.
1.2.3 Basic Purposes of
performanceappraisal
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Effective performance appraisal systems contain two basic systems operating in
conjunction: an evaluation system and afeedback system.
The main aim of the evaluation system is to identify theperformance gap (if any). This gap is
the shortfall that occurs when performance does not meet the standard set by the organization
as acceptable.
The main aim of the feedback system is to inform the employee about the quality of his or her
performance. (However, the information flow is not exclusively one way. The appraisers also
receive feedback from the employee about job problems, etc.)
One of the best ways to appreciate the purposes of performance appraisal is to look at it from
the different viewpoints of the main stakeholders:
The employee and The organization.
Employee Viewpoint
From the employee viewpoint, the purpose of performance appraisal is four-fold:
(1) Tell me what you want me to do
(2) Tell me how well I have done it
(3) Help me improve my performance
(4) Reward me for doing well.
1.2.4 Organizational Viewpoint
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From the organization's viewpoint, one of the most important reasons for having a system of
performance appraisal is to establish and uphold theprinciple of accountability.
For decades it has been known to researchers that one of the chief causes of organizational failure
is "non-alignment of responsibility and accountability." Non- alignment occurs where employees
are given responsibilities and duties, but are not held accountable for the way in which those
responsibilities and duties are performed. What typically happens is that several individuals or
work units appear to have overlapping roles.
The overlap allows - indeed actively encourages - each individual or business unit to "pass thebuck" to the others. Ultimately, in the severely non-aligned system, no one is accountable for
anything. In this event, the principle of accountability breaks down completely. Organizational
failure is the only possible outcome.
In cases where the non-alignment is not so severe, the organization may continue to function,
albeit inefficiently. Like a poorly made or badly tuned engine, the non-aligned organization
may run, but it will be sluggish, costly and unreliable. One of the principal aims of performance
appraisal is to make people accountable. The objective is to align responsibility and
accountability at every organizational level.
Benefits of Appraisal
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Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working
life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-
one discussion of important work issues that might not otherwise be addressed.
Almost universally, where performance appraisal is conducted properly, both supervisors and
subordinates have reported the experience as beneficial and positive.
Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and
correct existing problems, and to encourage better future performance. Thus the performance of
the whole organization is enhanced.
For many employees, an "official" appraisal interview may be the only time they get to have
exclusive, uninterrupted access to their supervisor. Said one employee of a large organization
after his first formal performance appraisal, "In twenty years of work, that's the first time
anyone has ever bothered to sit down and tell me how I'm doing."
The value of this intense and purposeful interaction between a supervisors and
subordinate should not be underestimated.
Motivation and Satisfaction
Performance appraisal can have a profound effect on levels of employee motivation and
satisfaction - for better as well as for worse.
Performance appraisal provides employees with recognition for their work efforts. The power of
social recognition as an incentive has been long noted. In fact, there is evidence that human
beings will even prefer negative recognition in preference to no recognition at all.
If nothing else, the existence of an appraisal program indicates to an employee that the
organization is genuinely interested in their individual performance and development. This
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alone can have a positive influence on the individual's sense of worth, commitment and
belonging.
The strength and prevalence of this natural human desire for individual recognition should notbe overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced
if more attention were paid to it. Regular performance appraisal, at least, is a good start.
Training and Development
Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur -
for a supervisor and subordinate to recognize and agree upon individual training and
development needs.
During the discussion of an employee's work performance, the presence or absence of work
skills can become very obvious - even to those who habitually reject the idea of training for
them!
Performance appraisal can make the need for training more pressing and relevant by linking
it clearly to performance outcomes and future career aspirations.
From the point of view of the organization as a whole, consolidated appraisal data can form a
picture of the overall demand for training. This data may be analysed by variables such as sex,
department, etc. In this respect, performance appraisal can provide a regular and efficient
training needs audit for the entire organization.
Recruitment and Induction
Appraisal data can be used to monitor the success of the organization's recruitment and induction
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practices. For example, how well are the employees performing who were hired in the past two
years?
Appraisal data can also be used to monitor the effectiveness of changes in recruitmentstrategies. By following the yearly data related to new hires (and given sufficient
numbers on which to base the analysis) it is possible to assess whether the general quality of the
workforce is improving, staying steady, or declining.
Employee Evaluation
Though often understated or even denied evaluation is a legitimate and major objective of
performance appraisal.
But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative
and developmental priorities appear to frequently clash. Yet at its most basic level, performance
appraisal is the process of examining and evaluating the performance of an individual.
Though organizations have a clear right - some would say a duty - to conduct such evaluations
of performance, many still recoil from the idea. To them, the explicit process of judgment can be
dehumanizing and demoralizing and a source of anxiety and distress to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and
development at the same time; it must be one or the other.
But there may be an acceptable middle ground, where the need to evaluate employees
objectively, and the need to encourage and develop them, can be balanced.
1.2.5 Performance Management and Pay
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As the IPD survey demonstrated, performance management is not inevitably associated with pay,
although this is often assumed to be the case. Only 43% of the respondents to the survey with
performance management had performance related pay (PRP). The research, however, showed
that contingent or differential pay is still an important element in many performance-management
schemes. This is because paying for performance or for competence, or both, is regarded by
many organizations as desirable for three reasons:
It motivates people to perform better or to develop their skills and competencies.
It delivers the message that performance and competence are important
It is fair and equitable to reward people differentially according to their
performance, competence or contribution.
The Link to Rewards
Research (Bannister & Balkin, 1990) has reported that appraisees seem to have greater
acceptance of the appraisal process, and feel more satisfied with it, when the process is
directly linked to rewards. Such findings are a serious challenge to those who feel that
appraisal results and reward outcomes must be strictly isolated from each other.
There is also a group who argues that the evaluation of employees for reward purposes, and
frank communication with them about their performance, are part of the basic responsibilities
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of management. The practice of not discussing reward issues while appraising performance is,
say critics, based on inconsistent and muddled ideas of motivation.
In many organizations, this inconsistency is aggravated by the practice of having separate wageand salary reviews, in which merit rises and bonuses are decided arbitrarily, and
often secretly, by supervisors and manager
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Review Of literature & Design
2.1 Introduction
Performance management is a strategic and integrated approach ton delivering sustained
success to organization by improving the performance of the people who work in them and
by developing the capabilities of teams and individual contributors. Performance
management is:
Strategic in the sense that it is concerned with the broader issues facing the business if it
is to function effectively in its environment and with the general direction in which it intends
to go to achieve longer-term goals
2.2 Review of literature
Performance evaluations have been conducted since the times of
Aristotle (Landy, Zedeck, Cleveland, 1983). The earliest formal employee
performance evaluation program is thought to have originated in the
United States military establishment shortly after the birth of the
republic (Lopez, 1968). The measurement of an employees performance
allows for rational administrative decisions at the individual employee
level. It also provides for the raw data for the evaluation of the
effectiveness of such personnel- system components and processes as
recruiting policies, training programs, selection rules, promotional
strategies, and reward allocations (Landy,Zedeck, Cleveland, 1983).
In addition, it provides the foundation for behaviorally based employee counseling.
In the counseling setting, performance information provides
the vehicle for increasing satisfaction, commitment, and motivation of
the employee. Performance measurement allows the organization to tell
the employee something about their rates of growth, their competencies,
and their potentials.
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There is little disagreement that if well done,
performance measurements and feedback can play a valuable role in
effecting the grand compromise between the needs of the individual and
the needs of the organization (Landy, Zedeck, Cleveland, 1983).
2.3 Statement of the problem
The organization currently follows a review process wherein the manger gives feedback to the
employees working under him and based on it a rating is given. The report tries to find out the
ambiguity in the performance management system, whether the employees are satisfied with
the current system.
2.4 Objectives
In depth understanding of the goal-setting process and the performance management system in
the organization.To measure the effectiveness of the same
To measure the employee satisfaction in these processes
To identify the areas which need to be improved upon
2.5 Methodology
Sampling technique:
The sampling technique adopted is random sampling. It includes all those employees who have
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undergone through their annual performance review.
Sample size:
The sample size consists of 183 employees of ABB INCRC (India Corporate Research
Centre), Bangalore.
Sample Description:
The sample size consists of employees of 7 departments. They are as follows:
800xA
PDI
TDD
Quality
Support (HR, Finance, Purchase, Knowledge management) The number of
employees covered in each department is as follows:
Departments No. of Employees
800xA 87PDI 65
TDD 18
Quality 5
Support 8
Total 183
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The employees covered include Project managers, Group Managers. Technical Engineers etc. All
employees have undergone their Annual performance review.
2.5.1 Types of Data:
Data is the fact of an event. Data is the base for every research work.
The data is mainly classified into two groups.
Primary data:Thrust has been on collection of primary data.
Structured questionnaire has been used and discussed personally
with the respondents to get their responses.
Secondary data: Books, journals, websites etc., have been
consulted for obtaining related information, and also for
crosschecking of primary data.
2.5.2 Data Gathering Procedures:
Surfing the net
Reading & note making for secondary data
Structured Questionnaire.
Personal Intervies
Collection of data:
Employee feedback questionnaire was administered on the employees and feedback was taken through
personal interview method and through e-mail from those employees who were onsite.
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Instrumentationtechniques:
The instrumentation technique used is the graphical method of analysis.
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Profile Of Industry
3.1 Organization Profile
ABB is a leader in power and automation technologies that enable utility and industry customers to
improve performance while lowering environmental impact.
ABB India serves utility and industry customers with the complete range of ABBs offerings. The
company has a vast installed base, extensive local manufacturing at 8 units and a countrywide
marketing and service presence. As a strategic thrust to standard products business, ABB has a
national channel partner network, which ensures geographical reach and penetration of its
products and services.
In order to leverage Indias intrinsic technology strengths and the vast pool of highly qualified
software professionals, ABB has set up a global R&D Centre in Bangalore, which focuses on
Industrial IT development and deployment. It also helps maintain and support a range of software
intensive products and acts as a partner for the ABB R&D centers as well as business areas within the
group.
Vision:
ABBs vision is to be The Value Creator. Working closely with our customers,
understanding their business needs and local market conditions. We ensure our Customer's
success through our innovative products, systems, services and complete solutions; combining
world-class technologies, proven expertise and strong local insight. In turn, our customer's success isechoed as Value for our stakeholders i.e. shareholders, employees and the communities in which we
operate
3.2 ABB India History
General:
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The Company was incorporated on 24th December 1949 as Hindustan Electric Company Limited. In
1965, the Companys name was changed to Hindustan Brown Boveri Limited (HBB). Pursuant to the
Scheme of Amalgamation of Asea Limited with HBB with effect from 1st January 1989, the name was
further changed to Asea Brown Boveri Limited
(ABB) with effect from 13th October 1989.
Flakt India Limited was amalgamated with ABB with effect from 5th October 1995. During 1994-95, a
joint venture Company - ABB Daimler-Benz Transportation AG (Adtranz) was established by ABB
Zurich and Daimler-Benz AG, Germany, in Germany. A subsidiary of Adtranz was incorporated in
India viz. ABB Daimler-Benz Transportation Limited which took over the Transportation Business of
the Company effective 1st January 1996.
ABBs power generation business was globally transferred into the new 50-50 JV with Alstom in
1999. In India the power generation business has been demerged and transferred to ABB Alstom
Power India Ltd. with effect from 1st April 1999. In consideration of the transfer of the power
business, each shareholder of ABB has been allotted one share in ABB Alstom Power India Ltd. for
every share held in the company.
Capital:
The Authorized Share Capital of the Company is Rs.500,000,000 and the paid-up share capital of the
Company as at the end of the financial year ended 31st December 1999 is Rs.414, 183,560, consisting
of 41,418,356 Equity Shares of the face value of Rs.10 each.
Shareholding Pattern:
Asea Brown Boveri Limited, India, is a partly owned subsidiary of ABB Asea Brown Boveri
Limited, Zurich, Switzerland (ABBZH). ABBZH and Flkt AB, Sweden, a 100 percent subsidiary of
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ABBZH, hold 50.99% of Equity Shares in the Company. The balance stake is held by: FIs 22.14%,
FIIs 3.63%, MFs 2.32, Non-resident Individual
0.08%, Nationalised Banks 0.15%, Bodies Corporate 0.93%,Directors and their relatives
0.01%, NSDL (Transit) 1.95% and General Public 17.8%.
Businesses of ABB:
ABB is a global leader in power and automation technologies that enable utility and industry
customers to improve their performance while lowering environmental impact. The ABB Group of
companies operates in around 100 countries and employs about108,000 people.
Power Products
Power Products are the key components to transmit and distribute electricity. The division incorporates
ABB's manufacturing network for transformers, switchgear, circuit breakers, cables and associated
equipment. It also offers all the services needed to ensure products' performance and extend their
lifespan. The division is subdivided into three business units.
Power Systems
Power Systems offers turnkey systems and services for power transmission and distribution grids, and
for power plants. Substations and substation automation systems are key areas. Additional highlights
include flexible alternating current transmission systems (FACTS), high-voltage direct current
(HVDC) systems and network management systems. In power generation, Power Systems offers the
instrumentation, control and electrification of power plants. The division is subdivided into four
business units.
Automation Products
This ABB business serves customers with energy efficient and reliable products to improve customers'
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productivity, including drives, motors and generators, low voltage products, instrumentation and
analytical, and power electronics. More than one million products are shipped daily to end customers
and channel partners, spanning a wide range of industry and utility operations, plus commercial and
residential buildings
Process Automation
The main focus of this ABB business is to provide customers with integrated solutions for control,
plant optimization, and industry-specific application knowledge. The industries served include oil
and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and
turbo charging. Key customer benefits include improved asset productivity and energy saving
Robotics
ABB has the world's largest installed base of industrial robots -- also providing robot software,
peripheral equipment and modular manufacturing cells for tasks such as assembly, painting and
finishing, and machine tending. Key markets include automotive, foundry, packaging, material
handling and consumer industries. A strong solution focus leverages thousands of successful
applications for manufacturers worldwide.
In addition to ABB's automation activities directed at the oil and gas industries, ABB Lummus
Global continues to design and supply production facilities, refineries and petrochemical plants.
Performance Management at ABB
The performance appraisal system in ABB follows 3 steps. They are as follows:
1. Goal-Setting
2. Mid-Year Performance Review
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3. Annual Performance Review
As an effective organization, work is planned in advance. This includes setting performance
expectations and goals for individuals in order to channel efforts toward achieving organizational
objectives. Involving employees in the planning process is essential to their understanding of the
goals of the organization, what needs to be done, why it needs to be done, and expectations for
accomplishing goals
In the middle of the year, ideally in July, a performance review is conducted wherein the progress on
the goals set is discussed by the employees with their managers and the necessary plans of action are
discussed thereupon.
In the month of March, an annual performance review is conducted wherein the actual performance
is compared with the standards set and the employees performance is evaluated by giving certain
weightages/ratings. Based on this review a hike in salary is decided.
(Please refer to the diagram below for the review cycle being followed)
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3.2.1 Perform Review Cycle
Goal-Setting Mid year
(March) Review (july)
Annual Performance Review
(March following year)
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Analysis & Discussion
Table 1: Table showing the responses of employees whether the Goal-
Setting was done within30 days of joining
Goal-setting done within 30 days Employees Percentage
Yes 30 94%
No 2 6%
Total 32 100
Interpretation: The above table indicates that 94% of the employees goal-setting was
done within 30 days of joining and 6% of the employees goal-setting was not done
within 30 days of joining. This is applicable only to those employees who have joined in
the year 2011.
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Graph 1: Graph showing the distribution of employees whose goal- setting was
done within 30 days
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% of Employees 94% 6%
Yes No
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Table 2: Table showing the responses of employees as to whether their mid
year reviews been conducted
Mid year
Review
% of Employees No. of Employees
Yes 98 180
No 1 2
NA 1 1
Total 100 183
Analysis: The above table indicates that 98% of the employees mid-year review has been conducted
and 1% of the employees mid year review has not been conducted .it is not applicable to 1 employee.
Interpretation: It is not applicable to one employee who joined in the middle of the year.
Graph 2: Graph showing the distribution of employees whose mid-year review has
beenconducted
0
10
20
30
40
50
60
70
80
90
100
% of Employees 98 1 1
Yes No NA
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Table 3: Table showing the responses of employees as to whether their
annual performance review was conducted
Annual review % of Employees No. of Employees
Yes 99% 181
No 1% 2
Analyisi: From the above table, it is clear that 99% of the employees annual review
was conducted and only 1% of the employees annual review did not happen.
Interpretation: Annual review did not happen to that employee who was onsite.
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Graph 3: Graph showing the distribution of employees whose annual performance
review has been conducted
0%
10%20%
30%
40%
50%
60%
70%
80%
90%
100%
% of Employees 99% 1%
Yes No
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Table 4: Table showing the responses of employees as to opportunity to
bring out issues during the review session
Particulars % of Employees No. of Employees
Strongly agree 13 23
Agree 66 122
Neutral 13 24
Disagree 7 12
Strongly disagree 1 2
Total 100 183
Analysis: The above table shows that 66% of employees agree that they had an
opportunity to bring out their issues during their review session, while there are13% of
the employees who strongly agree and are neutral about the same. 7% of the employees
disagree and 1% of the employees strongly disagree that they got an opportunity to bring
out issues during the feedback session.
Interpretation: The reasons given by employees who said that they did not get an
opportunity to bring out issues during the feedback are as follows:
Time constraint
They felt it was more of a one-sided feedback as the hike in pay was decided prior to the
discussion and the employees opinion was not sought
.
Graph 4: Graph showing the distribution of opinion of employees as to
whether they had an opportunity to bring out iss
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0%
10%
20%
30%
40%
50%
60%
70%
% of Employees 13% 66% 13% 7% 1%
Strongly agree Agree Neutral DisagreeStrongly
disagree
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Table 5: Table showing the responses of employees whether their manager
was receptive during the review session
Analysis: The above table shows that 64% employees agree that their manager was receptive during
the review meeting. 17% employees are neutral about the same, while
14% of employees strongly agree. 4% and 1% of the employees disagree and strongly disagree
respectively.
Interpretation: Employees who have disagreed that their manager was receptive during the
feedback session felt that their manager had a fixed mindset and was not open for an open discussion.
Particulars % of Employees No. of Employees
Strongly agree 14 26
Agree 64 118
Neutral 17 31
Disagree 4 7
Strongly disagree 1 1
Total 100 183
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Graph 5: Graph showing the responses of employees whether their manager was
receptive during the review session
0%
10%
20%
30%
40%
50%
60%
70%
% of Employees 14% 64% 17% 4% 1%
Strongly agree Agree Neutral DisagreeStrongly
disagree
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Graph 6: Graph showing the responses of employees as to whether all their issues
were addressed or planned to be addressed
Table 6: Table showing the responses of employees as to whether all
their issues were addressed or planned to be addressed
Particulars % of Employees No. of Employees
Strongly agree 4 7
Agree 57 104
Neutral 28 51
Disagree 9 16
Strongly disagree 3 5
Total 100 183
Analysis: From the above table it is clear that 57% of the employees agree that all theirissues were addressed or are planned to be addressed, whereas, 28% and 4% of the
employees are neutral and agree about the same. 9 % of the employees disagree to it and
3% of the employees strongly disagree.
Interpretation: Most of the employees feel that it will take time to address certain
issues. Those employees who strongly disagreed that their issues were not addressed
fell that there is no proper mechanism to address these issues.
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Table 7: Table showing the responses as to whether the discussion helped in
improving the performance
Particulars % of Employees No. of Employees
Strongly agree 10 19
Agree 52 95
Neutral 25 46
Disagree 11 21
Strongly disagree 1 2
Total 100 183
Analysis: The above table indicates that 52% of the employees agree that the discussion
helped in improving their performance, whereas, 25% of the employees are neutral about the
same. 10% of the employees strongly agree to it, 11% and 1% of the employees disagree andstrongly disagree to it.
Interpretation: The reasons given by employees to disagree that discussions helped in
improving their performance are as follows:
They felt the discussion was too formal and it was for a very short duration.
Though weaknesses are revealed, steps to overcome the same are not told by
the managers.
The discussion is restricted to the template. There are also problems outside the
work area which may affect the performance of an employee which are neglected.
Graph 7: Graph showing the responses as to whether the discussion helped in
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improving the performance
0%
10%
20%
30%
40%
50%
60%
% of Employees 10% 52% 25% 11% 1%
Strongly agree Agree Neutral DisagreeStrongly
disagree
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Table 8: Table showing the responses of employees whether their
relationship with their manager improved after the discussion
Particulars % of Employees No. of Employees
Strongly agree 8 15
Agree 39 71
Neutral 47 87
Disagree 5 9
Strongly disagree 1 1
Total 100 183
Interpretation: The above table shows that 47% of employees are neutral about their
relationship with the manager improved after the discussion. 39% of the employees agree to the
same whereas 8% of the employees strongly agree to it 5% and 1% of the employees
disagree and strongly disagree to the same.
Inference: Most of the employees were of the opinion that their relationship with their
manager has always been the same
Graph 8: Graph showing the responses of employees whether their
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relationship with their manager improved after the discussion
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
% of Employees 8% 39% 47% 5% 1%
Strongly agree Agree Neutral DisagreeStrongly
disagree
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Table 9: Table showing the responses of employees to the extent of role clarity
after the discussion
Particulars % of Employees No. of Employees
Very High 8 14
High 5 91
Neutral 28 51
Low 13 24
Very low 1 2
Nil (was not discussed) 1 1
Total 100 183
Analysis: The above table that 50% of the employees rate high on the extent of role clarity,
followed by 28% of the employees who are neutral about the same.
13% of the employees rate low on the extent of role clarity and 1% of the employee rates as very low.
1% of the employee says nil as it was not discussed at all during the review meeting.
Interpretation: Employees who rated very low and low to the extent of role clarity were of the
following opinion: Technical competency and experience not in par with the role.
No clarity of role on the part of he manager.
Some employees have started on with a new project and they are not clear on the same.
Graph 9: Graph showing the responses of employees to the extent of role clarity
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after the discussion
Table 10: Table showing the responses of employees whether there was
progress on the last review discussion
0%
5%
10%15%
20%
25%
30%
35%
40%
45%
50%
Very High High Neutral Low Very low Nil (wasnot
discussed)% of Employees 8% 50% 28% 13% 1% 1%
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Particulars % of Employees No. of Employees
Yes 65 119
No 21 39
NA 14 25
Total 100 183
Analysis: The above table indicates that 65% of the employees agree that there was progress
on the last review discussion. 21% of the employees disagree that there was some progress on
the last review discussion. It is not applicable (NA) to 14% of employees who have gone
through their first review discussion (Employees who have joined in the year 2011).
Interpretatione: The employees who feel their issues have not been addressed are of the
opinion that it is beyond the control of the manager and are subject to the limitations of the
organization. It will take some time to address these issues. Most of the issues are related to
role clarity and change of role.
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Graph 10: Graph showing the responses of employees whether there
was progress on the last review discussion
0%
10%
20%
30%
40%
50%
60%
70%
% of Employees 65% 21% 14%
Yes No NA
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Graph 11: Graph showing the responses of employees whether they worked under
two managers during the appraisal period
Table 11: Table showing the responses of employees whether
the worked under two managers during the ppraisal period
Particulars % of Employees No of
employees
Yes 28 51
No 72 132
Total 100 183
Analysis: From the above table it is clear that 72% employees did not work under
two managers during their appraisal period and 28% of the employees workedunder two managers during their appraisal period.
Interpretation: Depending on the projects some employees are supposed to work
under two managers. The two managers give their combined rating for the
appraisal.
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0%
10%
20%
30%
40%
50%
60%
70%
80%
% of Employees 28% 72%
Yes No
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Graph 12: Graph showing the responses of employees who worked under
two managers as to whether it affected their appraisal rating
Table 12: Table showing the responses of employees who worked
under two managers as to whether it affected their
appraisal rating
Particulars % of Employees No. of Employees
It did not affect 61 31
Positively affected 8 4
Negatively Affected 25 13
No comments 6 3
Total 100 183
Analysis: From among the 51 employees (i.e., 28% of employees), who worked
under two managers, 61% of them feel that it did not affect their appraisal rating
in any ways, whereas, 25% of the employees feel it has negatively affected their
rating, 8% of the employees feel it positively affected and 6% employees did not
wish to comment on the same.
Interpretation: 25% of the employees who felt working under two managers
affected their appraisal rating negatively were of the opinion that one among the
two managers gave a low rating in spite of one of the manager giving a higher
rating. There was no proper communication among the two managers.
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0%
10%
20%
30%
40%
50%
60%
70%
% of Employees 61% 8% 25% 6%
It did not affect Positively affectedNegatively
AffectedNo comments
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Table 13: Table showing the responses of employees
whether they perceived fairness in
performance evaluationParticulars % of Employees No. of Employees
Yes 75 138
No 25 45
Total 100 183
Analysis: The above table indicates that 75% of the employees perceived
fairness in the performance evaluation system and 25% of the employees did
not perceive fairness in performance evaluation.
Interpretation: The reasons given by employees as to why they do not
perceive fairness in the performance evaluation are as follows:Managers
feedback can be biased. Customer/ Service orientation missing in the
feedback process. No fixed criteria for evaluating.No transparency. Purely
based on opinion rather than facts.Work done out of the projects such as
conducting interviews etc are not taken while evaluating
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Graph13: Graph showing the responses of employees whether they perceived
fairness in performance evaluation
0%
10%
20%
30%
40%
50%
60%
70%
80%
% of Employees 75% 25%
Yes No
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Table14: Table showing the responses of employees as to the level of satifaction with Performance
Evaluation system
Particulars % of Employees No. of Employees
Highly satisfied 3 6
Satisfied 42 77
Neutral 36 65
Dissatisfied 14 26
Highly dissatisfied 5 9
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Total 100 183
Analysis: From the above table it is clear that 42% of the employees are satisfied with the
Performance appraisal system, 36% of the employees are neutral about it. 14% of the employees are
dissatisfied with the system, 3% and 5% of the employees are highly satisfied and highly
dissatisfied respectively.
Interpretation: The employees who are dissatisfied with the system are of the opinion that there
are no fixed standards across the organization to evaluate an employee. It varies depending on the
project. There is no transparency in the evaluation process
Graph 14: Graph showing the responses of employees as to the level of
satisfactionwith respect to the Performance Evaluation system
FINDINGS:0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
% of Employees 3% 42% 36% 14% 5%
Highly
satisfiedSatisfied Neutral Dissat isfied
Highly
dissatisfied
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5.1 FINDINGS
1. The goal-setting process was done for 94% of employees and it was not done for6%
of employees.
2. The mid review was conducted for 98% of the employees and it was not
conducted for one employee as the person was on a long leave.
3. The annual performance review was conducted for 99% of employees and it did
not happen for one employee who was onsite.
4. Nearly 66% of the employees agree that they had an opportunity to bring out their
issues during the feedback process and 7% of the employees disagree for the same as they
feel there was no enough time to discuss during the review session.
5. The employees who felt that their manager was not receptive during the feedback
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session were of the opinion that their manager had a fixed mindset during the review
session and were not open for discussions
6. The employees felt that there is no proper mechanism to address the issues and
some were of the opinion that it will tae time to address certain issues which were beyond
the control of the manager.
7. The employees feel though the areas of improvement are revealed in the review
process, no steps to overcome the weaknesses and improve the performance are
suggested by the manager.
8. The discussions are too formal and the employees problems outside the work
area are not taken into account which may Most of the employees feel that theirrelationship with their manager has always been the same.
9. 50% of the employees are high on their role clarity and the rest feel that it was
never discussed during the review process and they needed a role change
10. Employees whose appraisal rating affected negatively because they worked under
two managers feel that there was no proper communication between the two managers.
11. 25% of the employees who perceived that the performance appraisal system as
unfair believed that the there was no fixed criteria across the organization and it lacked
transparency. This also reflected on the satisfaction level of employees on the Performance
Appraisal system in the organization.
12.The entire review process was based on opinion of the manager rather than facts.
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5.2 Recommendations
1. A full-fledged satisfaction survey must be conducted once in 6 months for the staff
cadre, the name of the person must be kept anonymous, only the department must be
revealed. This will unearth lot of expectations of employees
2. Rotation must be made a part and parcel of the system. Job rotation should also be
done at lower levels in the organization depending on a persons interest and
capabilities.
3. Providing more challenging jobs than using money or material rewards as a motivate
or could help the company. This is the basic nutrient of career management.
4. As seen from our research findings, 'Affiliation' seems to be very unimportant to
many employees. The company can take steps to develop closeness between
employees and between the employees and the company. This can be achieved
through 'Employee Engagement Program
5. Opportunities must be given to employees who opt for higher studies. They can get a
hike in salary, job rotation, more span of control or even promotion. This will helpthe company in the long run as more and more of their employees will come under
the educated workforce.
6. ABB currently follows a feedback procedure which is a one-way feedback
process wherein the manager gives his feedback to the employees about their
performance. During the post-review feedback survey, it was revealed that most of
the employees feel that the managers opinion can be biased and it is not supported
by facts but purely based on the opinion of the manager. This has a great
repercussion on the motivation level of the employees which in turn will affect the
performance of the employees.
7. Keeping in view the above factors, 360-degree feedback process can be
implemented. Since ABB is a flat organization (non-hierarchical), the most suitable
form of feedback system would be the 360-degree feedback.
.
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5.2.1 Stakeholders in a 360-degree feedback
Superior
Peers Team
Members
Feedbackon
the
employees
from:
Self Customers
Staff
5.2.2 The Feedback Loop
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I.Observation
II.Briefing
VIII. Changedbehaviour
VIIAction plan
III.Questionnaie
completion
IV. Report
Processing
VIReflection
V.
Feedback
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The feedback loop shows the stages in the 360-degree feedback process. Looking at the loop, a 360-
degree feedback process formalizes a natural process of observation (Stage I). People observe each
other all the time, often unconsciously and unsystematically. They gain impressions about the
behavior. These perceptions are formed continuously in anyrelationship
The formalization comes from selecting and briefing respondents (Stage 2) to think about the
participants behavior in a conscious and structured way, usually by completing a Questionnaire
(Stage 3).
The data is collected and then processed into a formal report (Stage 4) containing respondents
perceptions expressed in numerical, graphical or written form, which is then presented to the participant
as feedback (Stage 5).
The minimum time required for these first five stages is two months. Reflection can involve a
number of actions on the part of the participant: trying to understand and accept the data by means of
self-analysis, discussion with a facilitator, coaching by others including the superior, sharing
feedback with others and getting clarification on points which were unclear.
Only when this has been done can the participant convert his or her thoughts into meaningful
and practical action plan (Stage 7) which will result in behavior change (Stage 8). More time is
needed for the behavior change to occur and be noticed (forward to Stage I again).
The whole process, from initial idea to the observation of a permanent improvement in performance,can take up to a year, and if any one stage is neglected then the results can
be disappointing.
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5.3 Conclusion
Managing employee performance is an integral part of the work that all managers and rating officials
perform throughout the year. It is as important as managing financial resources and program
outcomes because employee performance or the lack thereof, has a profound effect on both the
financial and overall objectives of any organization.
Research studies show that employees are likely to feel more satisfied with their appraisal
result if they have the chance to talk freely and discuss their performance. It is also more likely that
such employees will be better able to meet future performance goals.
Employees are also more likely to feel that the appraisal process is fair if they are given a chance to
talk about their performance. This is especially true when they are permitted to challenge and appeal
against their evaluation.
It is very important that employees recognize that negative appraisal feedback is provided with a
constructive intention, i.e., to help them overcome present difficulties and to improve their future
performance. Employees will be less anxious about criticism, and more likely to find it useful, when
they believe that the appraiser's intentions are helpful and constructive.
In contrast, "destructive criticism" - which is vague, ill-informed, unfair or harshly presented -
will lead to problems such as anger, resentment, tension and workplace conflict, as well as
increased resistance to improvement, denial of problems, and poorer performance.
Goal-setting is an important element in employee motivation. Goals can stimulate employeeeffort, focus attention, increase persistence, and encourage employees to find new and better ways to
work.
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The useful of goals as a stimulus to human motivation is one of the best supported theories in
management. It is also quite clear that goals which are specific, difficult and accepted by employees
will lead to higher levels of performance than easy, vague goals (such as do your best) or no goals at
all.
It is important that the appraiser (usually the employee's manager) be well-informed and credible.
Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable
about the employee's job and performance.
When these conditions exist, employees are more likely to view the appraisal process as accurate and
fair. They also express more acceptance of the managers feedback and a greater willingness to
change.
APPENDIX Questionnaire
Sir/ Madam,
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Please answer all the questions. There is no right or wrong answers. I assure you that the
information collected will be used research purposes only.
Questionn a ire No.
Goal-Setting and Performance Review at INCRC
1. Joining date at ABB:
2. Was the goal-setting done within 30 days of joining?
Yes No
3. Which month did the goal-setting take place last?
4. Was a mid-year performance review conducted?
Yes No
If yes, which month did the review take place?
5. Was an Annual performance review conducted?
Yes No
If yes, when did the review happen?
Performance Feedback
6. I had the opportunity to bring out issues to bring out all my issues during the last feedback
Strongly Disagree
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Disagree
Neutral
Agree
Strongly Agree
Comments
7. My manager was receptive during the feedback session
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Comments
8. All issues were addressed or planned to be addressed
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Comments
9. The discussion really helped in improving my performance
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
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Comments
10. My relationship with my manager improved after the discussion
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Comments
11. The extent of role clarity at the end of the review was
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Comments
12. There was progress on the last review discussion
Yes No
Comments
13. During the last appraisal period, I worked under two managers
Yes No
If yes, did it affect the appraisal rating?
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14. Do you perceive fairness in performance evaluation?
Yes No
15. How would you rate your level of satisfaction for the Performance Appraisal
System?
Highly Satisfied
Satisfied
NeutralDissatisfied
Highly Dissatisfied
16. Suggestions that will make the Performance Management System more creative, satisfactory and
mutually beneficial:
Please fill in your personal details:
a) Age:
20-30
31-40
41-50
Above 50
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b) Sex
Male
Female
c) Department
d) Role
THANK YOU
B IB L IOGRAPHY
Books:
Performance Management System------Michael Armstrong
Human Resource Management---------- J R Gordon, Boston: Allyn &
Bacon
Publications 2002
JOURNALS:
Business Line
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Websites:
360-Degree Feedback-----------------------Peter Wardwww.citehr.com
www.hrvi llage.com
www.abb.com
http://www.hrvillage.com/http://www.hrvillage.com/