Submitted by:Anil Saini 072Gaurav Mahajan 085Mitali Awasthi 093Ritika Bahl 108Nithya Kalyani 111

MeaningMeaning

It is a systematic evaluation of It is a systematic evaluation of the individual with respect to the individual with respect to his/her performance on the job his/her performance on the job and his/her potential for and his/her potential for development.development.

Objectives Of Performance Objectives Of Performance Appraisal.Appraisal.

Developmental Uses.Developmental Uses. Administrative Uses.Administrative Uses. Organisational/ Maintainence Organisational/ Maintainence

Uses.Uses. Documentation Purposes.Documentation Purposes.

Errors in rating and evaluationErrors in rating and evaluation  

Many errors based on the personal bias ,Many errors based on the personal bias ,

like halo effect (i.e. one trait influencing like halo effect (i.e. one trait influencing the evaluator’s rating for all the evaluator’s rating for all

other traits) etc. may creep in the other traits) etc. may creep in the appraisal process. Therefore the rater appraisal process. Therefore the rater

should exercise objectivity and fairness should exercise objectivity and fairness in evaluating and rating in evaluating and rating

the performance of the employees.the performance of the employees.

  

1. Halo Error:1. Halo Error:

Under this type of error, one marked Under this type of error, one marked characteristic or latest achievement or characteristic or latest achievement or failure of the appraisee (either failure of the appraisee (either favorable or unfavorable) may be favorable or unfavorable) may be allowed to dominate the appraisal for allowed to dominate the appraisal for the entire year.the entire year.

2. Logical Error:2. Logical Error:

This is a dangerous pitfall for the This is a dangerous pitfall for the inexperienced appraiser. He is very inexperienced appraiser. He is very often inclined to arrive at similar often inclined to arrive at similar assessments in respect of qualities assessments in respect of qualities that seem logically related.that seem logically related.

3. Constant Error:3. Constant Error:

When two appraisers rate an appraisee When two appraisers rate an appraisee their ratings may be different. One may their ratings may be different. One may show consistent leniency by giving him show consistent leniency by giving him high scores, the other may consistently high scores, the other may consistently rate him by giving low scores.rate him by giving low scores.

4. Central Tendency:4. Central Tendency:

It is also called as “Average Ratings”. It is also called as “Average Ratings”. Here, the appraiser tends to avoid giving Here, the appraiser tends to avoid giving frank views to the question asked or the frank views to the question asked or the appraiser is in doubt or he has appraiser is in doubt or he has inadequate information or he simply inadequate information or he simply wants to play safe and don’t displease wants to play safe and don’t displease anyone.anyone.

5. Mirror-Image Error or Projection Error:5. Mirror-Image Error or Projection Error:

This error arises when an appraiser This error arises when an appraiser expects his own qualities, skills, and expects his own qualities, skills, and values in an appraisee. The appraiser values in an appraisee. The appraiser may falsely believe that if the appraisee may falsely believe that if the appraisee is good he has to be like him (appraiser) is good he has to be like him (appraiser) because the appraiser considers himself because the appraiser considers himself as the standard.as the standard.

6. Spillover Error:6. Spillover Error:

This error occurs in the past This error occurs in the past performance appraisal ratings to performance appraisal ratings to unjustifiably influence current ratings. unjustifiably influence current ratings.

PROCESS OF PROCESS OF PERFORMANCE APPRAISALPERFORMANCE APPRAISAL

Design Appraisal ProgrammeDesign Appraisal Programme

Formal vs. InformalFormal vs. Informal

The first step in designing the appraisal The first step in designing the appraisal programme is to decide the appraisal programme is to decide the appraisal should be formal or informal. Formal should be formal or informal. Formal Appraisals usually occur at specified Appraisals usually occur at specified time periods-once or twice the year.time periods-once or twice the year.

Informal appraisals can take place Informal appraisals can take place whenever supervisor feels the need whenever supervisor feels the need for communication.for communication.

Designing an appraisal program Designing an appraisal program poses several questions, which poses several questions, which need answers. They are:need answers. They are:

1. Whose performance is to be 1. Whose performance is to be assessed????assessed????

2. Who are the appraisers????2. Who are the appraisers????

3. What should be evaluated????3. What should be evaluated????

4. When to appraise????4. When to appraise????

5. What problems are encountered????5. What problems are encountered????

6. How to solve the problems????6. How to solve the problems????

7. What methods of appraisal are to be 7. What methods of appraisal are to be used????used????

Essay appraisalEssay appraisal: :

The appraiser is asked to write an essay on The appraiser is asked to write an essay on the employee’s strengths, weaknesses and the employee’s strengths, weaknesses and potentials. This technique is more valid potentials. This technique is more valid and formal than complicated methods of and formal than complicated methods of appraisal. The biggest drawback in this appraisal. The biggest drawback in this method is that it is difficult to combine and method is that it is difficult to combine and compare the essays as it may touch upon compare the essays as it may touch upon various aspects of one’s performance and various aspects of one’s performance and qualifications. Another drawback is the qualifications. Another drawback is the variability of length and content in the variability of length and content in the essays.essays.

Ranking methodsRanking methods

This method is useful when it becomes This method is useful when it becomes necessary to compare people who work necessary to compare people who work for different supervisors, when there are for different supervisors, when there are several individual ratings an when several individual ratings an when appraisal forms are not particularly appraisal forms are not particularly useful. This method is also employed to useful. This method is also employed to compare people in different units of an compare people in different units of an organization.organization.

Paired comparison methodPaired comparison method

AA BB CC DD E Final RankE Final Rank

AA -- -- -- ++ ++ 33

BB ++ -- -- ++ ++ 22

CC ++ ++ -- ++ ++ 11

DD -- -- -- -- ++ 44

EE -- -- -- -- -- 55

No of Positive evaluation No of Positive evaluation

Total no. of evaluation * 100 = Total no. of evaluation * 100 = employee superior evaluationemployee superior evaluation

Forced choice ratingForced choice rating::

This technique is unbiased in comparison to This technique is unbiased in comparison to other techniques. This also does not involve other techniques. This also does not involve the intervention of a third party in appraisal. the intervention of a third party in appraisal. In this method, the raters are asked to choose In this method, the raters are asked to choose from among groups of statements those that from among groups of statements those that best fit the individual employee who is rated best fit the individual employee who is rated and those that least fit him/her. The and those that least fit him/her. The statements are then weighed and scored the statements are then weighed and scored the same way psychological tests are scored. This same way psychological tests are scored. This technique is limited to lower and middle technique is limited to lower and middle management levels in companies as the levels management levels in companies as the levels of jobs are similar to make standard common of jobs are similar to make standard common forms with this groupforms with this group..

Forced Distribution method

10% 20% 40% 20% 10%

poor Belowaverage

average good Excellent

No. of employees

Force distribution curve

Graphic rating scaleGraphic rating scale: :

This method is both consistent and This method is both consistent and reliable. A person’s quality and quantity reliable. A person’s quality and quantity of work is assessed in a graphic scale. A of work is assessed in a graphic scale. A variety of factors are taken into variety of factors are taken into consideration including his/her personal consideration including his/her personal traits like cooperation and reliability. traits like cooperation and reliability. Although the graphic scale is widely used, Although the graphic scale is widely used, it is under frequent controversy. But the it is under frequent controversy. But the graphic scale is more economical to graphic scale is more economical to develop and it is not complicated. develop and it is not complicated. Therefore it is easily acceptable by raters.Therefore it is easily acceptable by raters.

Critical incident appraisalCritical incident appraisal: :

This technique is appreciated by many This technique is appreciated by many employees and employers because it is employees and employers because it is natural and gives a supervisor actual natural and gives a supervisor actual factual incidents to discuss with the factual incidents to discuss with the employee. In this method, supervisors employee. In this method, supervisors are asked to keep a record on each are asked to keep a record on each employee and to record actual incidents employee and to record actual incidents of positive and negative behavior. The of positive and negative behavior. The discussion between the supervisor and discussion between the supervisor and his subordinate deals with actual his subordinate deals with actual behavior and not on traits..behavior and not on traits..

MODERNMODERN APPROACH-APPROACH-

The modern approach to performance development The modern approach to performance development has made the performance appraisal process more has made the performance appraisal process more formal and structured. Now, the performance formal and structured. Now, the performance appraisal is taken as a tool to identify better appraisal is taken as a tool to identify better performing employees from others, employees’ performing employees from others, employees’ training needs, career development paths, rewards training needs, career development paths, rewards and bonuses and their promotions to the next and bonuses and their promotions to the next levels. levels.

Appraisals have become a continuous and periodic Appraisals have become a continuous and periodic activity in the organizations. The results of activity in the organizations. The results of performance appraisals are used to take various performance appraisals are used to take various other HR decisions like promotions, demotions, other HR decisions like promotions, demotions, transfers, training and development, reward transfers, training and development, reward outcomes. The modern approach to performance outcomes. The modern approach to performance appraisals includes a feedback process that helps to appraisals includes a feedback process that helps to strengthen the relationships between superiors and strengthen the relationships between superiors and subordinates and improve communication subordinates and improve communication throughout the organization.throughout the organization.

  

Assessment centersAssessment centers::

In assessment centers, the assessment for In assessment centers, the assessment for future performance or potential of the future performance or potential of the employee is assessed in contrast to the employee is assessed in contrast to the past performance. Individuals from past performance. Individuals from different departments are brought different departments are brought together and they spend two to three together and they spend two to three working days on group assignments similar working days on group assignments similar to ones they will be handling if they were to ones they will be handling if they were promoted. The pooled judgement of the promoted. The pooled judgement of the observers leads to order of merit ranking observers leads to order of merit ranking on the participants.on the participants.

Management by Management by ObjectivesObjectives

MBO is a process of MBO is a process of agreeing upon objectives agreeing upon objectives within an organization so within an organization so that management and that management and employees agree to the employees agree to the objectives and objectives and understand what they understand what they are in the organization.are in the organization.

SOME OF THE IMPORTANT SOME OF THE IMPORTANT FEATURES AND ADVANTAGES OF FEATURES AND ADVANTAGES OF

MBO ARE:MBO ARE:

360 degree appraisal360 degree appraisal

360-degree feedback, 360-degree feedback, also known as "multi-also known as "multi-rater feedback," rater feedback," "multisource feedback "multisource feedback is feedback that comes is feedback that comes from all around an from all around an employee. "360" refers employee. "360" refers to the 360 degrees in a to the 360 degrees in a circle, with an circle, with an individual figuratively in individual figuratively in the center of the circle.the center of the circle. Feedback is provided Feedback is provided by subordinates, peers, by subordinates, peers, and supervisorsand supervisors

360 degree appraisal has four 360 degree appraisal has four integral components:integral components:

11. Self appraisal. Self appraisal

2. Superior’s appraisal2. Superior’s appraisal

3. Subordinate’s appraisal3. Subordinate’s appraisal

4. Peer appraisal.4. Peer appraisal.

Behavioral observation Behavioral observation scalescale

A behavior observation scale A behavior observation scale (BOS) is an appraisal method (BOS) is an appraisal method

that measures behavior that measures behavior against levels of performance against levels of performance

and also measures the and also measures the frequency with which the frequency with which the

behaviors occur.behaviors occur.

The rationale is simple. The rationale is simple. Good Good behavior will produce good behavior will produce good

performanceperformance, , bad behavior will bad behavior will be a distortionbe a distortion. This method is . This method is

applicable for production-applicable for production-employees performance, too.employees performance, too.

Use of Appraisal Data:Use of Appraisal Data:

Remuneration administration.Remuneration administration. Validation of selection programmes.Validation of selection programmes. Employee training and development Employee training and development

Programmes.Programmes. Promotion, transfer and lay off Promotion, transfer and lay off

decision.decision. Grievance and Discipline Programmes.Grievance and Discipline Programmes. HR planning.HR planning.

BARRIERS TO EFFECTIVE BARRIERS TO EFFECTIVE APPRAISALAPPRAISAL

Faulty assumptionsFaulty assumptions Psychological blocksPsychological blocks Technical pitfallsTechnical pitfalls

-Criterion problem-Criterion problem

-Distortions-Distortions

OVERCOMING BARRIERS TO OVERCOMING BARRIERS TO APPRAISALSAPPRAISALS

The reliability of rating system can be The reliability of rating system can be obtained by comparing the rating of two obtained by comparing the rating of two individuals for the same person.individuals for the same person.

The appraisal system can be designed to The appraisal system can be designed to help in minimizing undesirable effects.help in minimizing undesirable effects.

The ratings should be reviewed with the The ratings should be reviewed with the ratee.ratee.

To make appraisal system effective, it To make appraisal system effective, it should be backed by effective feedback should be backed by effective feedback system.system.

PERFORMANCE APPRAISAL USED BY PERFORMANCE APPRAISAL USED BY NOKIA NOKIA

Nokia holds a strategy review process Nokia holds a strategy review process every six months - a year being too long in every six months - a year being too long in the mobile phone business. The review is the mobile phone business. The review is followed by a discussion with individuals followed by a discussion with individuals about what they need to be doing and the about what they need to be doing and the support they need to do it. According ot support they need to do it. According ot them, "If a person is clear on what to do, them, "If a person is clear on what to do, you don't need to tell them. They're you don't need to tell them. They're naturally empowered. What's important is naturally empowered. What's important is the quality of the discussion."the quality of the discussion."

HCL realized that in service industry the value gets HCL realized that in service industry the value gets created not in the back office but in face to face created not in the back office but in face to face interaction between the customer and employees.interaction between the customer and employees.

Hence it is important to empower employees so that Hence it is important to empower employees so that they deliver more value to the customers. When an they deliver more value to the customers. When an employee is delighted, he will delight the customer.employee is delighted, he will delight the customer.

This gave birth to a path breaking philosophy called :This gave birth to a path breaking philosophy called : 'Employee First, Customer Second‘, termed by 'Employee First, Customer Second‘, termed by

Fortune Fortune as "The most modern management idea.”as "The most modern management idea.”

WHY DID IT BEGANWHY DID IT BEGAN

Employee First councils work on goals that areEmployee First councils work on goals that are

of of common interest to all employees common interest to all employees and alsoand also

help maintain a balance between work and life.help maintain a balance between work and life.

The councils allow employees to unleash theirThe councils allow employees to unleash their

creative talent. Last year over 1,500 eventscreative talent. Last year over 1,500 events

were conducted by EFC councils.were conducted by EFC councils.

EFCEFC

The purpose of this council is to focus onThe purpose of this council is to focus on

women development and to create anwomen development and to create an

inclusive, supporting and caring environment. A inclusive, supporting and caring environment. A women exclusive website was launched which women exclusive website was launched which has information of all women related policies, has information of all women related policies,

safety and security measures, work-life balance safety and security measures, work-life balance techniques.techniques.

Women First CouncilWomen First Council

‣ HCL’s annual survey of 20,000 people across the company rates 1,500 managers on 20 aspects of their performance.

‣ There is nothing unusual in running such a process. But what is unusual is that the results of the survey are aggregated and published online for every employee to look at

‣ This is a simple change in practice, but one with profound

consequences. For the manager, there is nowhere to hide if he or she gets negative feedback. Most managers take the feedback very seriously and make changes; a few choose to move on

‣ 360-degree feedback is not linked to the annual appraisal or to the compensation package. It is open for everyone to see, and that is enough to encourage changes in behavior.

Open 360 degree feedbackOpen 360 degree feedback

CASE STUDY…CASE STUDY…

Xerox ltd.Xerox ltd.

OLD APPRAISAL SYSTEMOLD APPRAISAL SYSTEM

The appraisal occurred once a year.The appraisal occurred once a year. It required employees to document their It required employees to document their

accomplishments.accomplishments. The manager would assess these accomplishments in The manager would assess these accomplishments in

writing and assign numerical ratings.writing and assign numerical ratings. The appraisal included a summary written appraisal The appraisal included a summary written appraisal

and a rating from 1 (unsatisfactory) to 5 (exceptional).and a rating from 1 (unsatisfactory) to 5 (exceptional). The ratings were on a forced distribution, controlled at The ratings were on a forced distribution, controlled at

the 3 level or below.the 3 level or below. Merit increases were tied to the summary rating level.Merit increases were tied to the summary rating level. Merit increase information and performance appraisals Merit increase information and performance appraisals

occurred in one session.occurred in one session.

CONSEQUENCES…CONSEQUENCES…

This system resulted in inequitable This system resulted in inequitable ratings ratings

This system was cited by employees This system was cited by employees as a major source of dissatisfaction.as a major source of dissatisfaction.

NEW APPRAISAL SYSTEMNEW APPRAISAL SYSTEM

The absence of a numerical rating The absence of a numerical rating system.system.

The presence of a half-year feedback The presence of a half-year feedback session.session.

The provision for development The provision for development planning.planning.

Prohibition in the appraisal guidelines Prohibition in the appraisal guidelines of of

STAGES OF NEW SYSTEMSTAGES OF NEW SYSTEM

I-I- The first stage occurs at the beginning The first stage occurs at the beginning of the year when the manager meets with of the year when the manager meets with each employee. each employee.

II-II- The second stage is a mid-year, The second stage is a mid-year, mandatory feedback and discussion mandatory feedback and discussion session between the manager and the session between the manager and the employee.employee.

III- III- The third stage in the appraisal The third stage in the appraisal process is the formal performance review, process is the formal performance review, which takes place at year’s end.which takes place at year’s end.

RESULTS OF NEW SYSTEMRESULTS OF NEW SYSTEM

81 percent better understood work group 81 percent better understood work group objectivesobjectives

84 percent considered the new appraisal 84 percent considered the new appraisal fairfair

72 percent said they understood how their 72 percent said they understood how their merit raise was determinedmerit raise was determined

70 percent met their personal and work 70 percent met their personal and work objectivesobjectives

77 percent considered the system a step 77 percent considered the system a step in the right directionin the right direction

CONCLUSION…CONCLUSION…

It can be clearly seen that the new It can be clearly seen that the new

system is a vast improvement over system is a vast improvement over the the

previous one. previous one.

QUESTIONSQUESTIONS

What type of performance appraisal is What type of performance appraisal is central to new system at Xerox? Which, if central to new system at Xerox? Which, if any, of the criteria for a successful appraisal any, of the criteria for a successful appraisal does this new system have?does this new system have?

Given the empahasis on employee Given the empahasis on employee development, what implications does this development, what implications does this have for hiring and promotions?have for hiring and promotions?

How do you think, management feels about How do you think, management feels about the new performance appraisal system? the new performance appraisal system? Why?Why?

Are there any potential negative aspects of Are there any potential negative aspects of the new performance appraisal system?the new performance appraisal system?

THANK YOU!!!THANK YOU!!!