S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

MBO & 360 Degree Performance Appraisal Approach and Practice in

H501: Managing Human Resources in Organizations

Presented by:S. M. Towhidul Haque

ZR 1501002Email: towhid_107@yahoo.com

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Performance AppraisalPerformance appraisal also referred as performance review, performance evaluation, career development discussion is a method by which the job

performance of an employee is documented and evaluated.

• effective management and evaluation of employee• develop individuals, improve organizational performance, feed into

business planning• enable management for monitoring the standards• delegation of responsibilities and tasks• enables individual and organizational training needs analysis and

planning

Essential

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Performance Appraisal Methods• Rating Scale• Critical Incident Technique• Behavioral Anchored Rating Scales (BARS)

Past Oriented Approach

• Field Review• Performance Test

Present Oriented Approach

• Management by Objectives (MBO)• 360-Appraisal System

Future Oriented Approach

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Management by Objectives (MBO)• Management by objectives (MBO), also known as management by results (MBR), is a

process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization in order to achieve them.

• The use of management objectives for performance appraising was first widely advocated in the 1950s by management theorist Peter Drucker.

• MBO seek to measure employee performance by examining the extent to which predetermined work objectives have been met. Usually the supervisor and subordinate establish the objectives jointly.

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

MBO Process Cycle

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

MBO Method EffectivenessAdvantage:• MBO method overcomes the problem of assuming the employee traits that is needed

for job success• Employees are judged according to real outcomes, and not on their potential for success• 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

Disadvantages:• MBO method can lead to unrealistic expectations of what cannot be reasonably

accomplished• Supervisors and subordinates must have very good "reality checking" skills to use MBO

appraisal methods• Objectives, by their very nature, tend to impose certain rigidity

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

360 Degree Approach• 360 Degree Feedback is a system or process in which employees receive confidential,

anonymous feedback from the people who work around them. This typically includes the employee's manager, peers, and direct reports.

• The feedback is typically provided on a form showing job skills / abilities / attitudinal / behavioral criteria and some sort of scoring or value judgment system by appraises peers, up-line managers, subordinate staff, team members, other staff, customers, suppliers

• Appraise should also assess themselves using the same feedback instrument or form.

• 360 degree feedback results are analyzed collectively to indicate the overall situation of the organization.

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Six Particles in 360 Degree Appraisal

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

360 Degree Approach EffectivenessAdvantage:• Reduce the single Rater biases• Peer and subordinate review may be beneficial for development purpose• Fair and transparent process that will encourage an open culture that values

feedback

Disadvantages:• 360 Degree appraisal system may jeopardies co-worker relationship• Managers challenging status quo and favoring empowerment of subordinates

usually rated higher by subordinate and rated lower by supervisors• Lack of professional maturity to handle inevitable negative comments

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

About Energis Power Corporation Ltd.Energis Power Corporation Ltd. is one of the emerging private power generation

company in Bangladesh

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Employee Development Form

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Employee Development Form (Cont.)Form assess employees

Dedication towards work

Competency level

Career development plan

Agreed set of objectives by the employee

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Employee Development Form (Cont.)• Achieving targets• Response to work pressure• Flexibility and ability to adjust• Accuracy and quality of performed

tasks• Safety & cleanliness oriented• Shouldering Responsibility• Punctuality• Acceptance of superiors directives• Cooperation in teamwork

Attitude towards work and behavior

• Professional skills• Making it happen • Building relationships in organization• Forward thinking & creativity• Self-confidence & initiative• Openness & flexibility

Competencies assessment (All Employees)

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Employee Development Form (Cont.)

• Team leader • Coaching • Influencing power • Problem solving• Goal focus

Competencies assessment (Above Managers)

Career Development Plan

• Employee Satisfaction• Career Expectation• Eagerness to take responsibility• Supervisors recommendation for

training

Performance Agreement

• Employee and supervisor collectively set objectives for the upcoming year

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Additional Bonus Structures for Performance Appreciation Production Bonus

Criteria Fulfillment :•All scheduled maintenance completed•No environmental spillage•Not more than three lost time accidents

•Housekeeping rate maintained over 75%

•Unscheduled overtime maintained less than 15%

Performance Bonus

Plant Factor X Availability Bonus % = 1000

•Reference value XXX ml / Kwh •Bonus @ 2% of the monthly gross salary will be entitled for each ml / Kwh reduction of fuel consumption.

Fuel Consu

mption:

•Reference value XXX ml / Kwh •Bonus @ 2% of the monthly gross salary will be entitled for each ml / Kwh reduction of fuel consumption.

Lube Oil Consumption:

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

Conclusion

• Key objectives• Validating selection and other management or cultural practice• Helping employees understand and take responsibility for better performance• Making decisions about pay or promotions

“Employee goals set through performance appraisals should be difficult but achievable, as goals that are overly ambitious are doomed for failure.”

Finally, Letting the employees know that the management have noticed their efforts to guide it’s employees towards having a more motivated workforce.

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

ReferencesIntroduction to Performance Appraisal By Archer North Retrieved from - http://www.performance-appraisal.com/intro.htm Management by Objectives By Archer North Retrieved from - http://www.performance-appraisal.com/results.htm 360 Degree Performance Appraisal The Economic Time, News Paper, 17 January, 2012 Retrieved from - http://www.whatishumanresource.com/360-degrees-performance-appraisal Understanding the Importance of Performance Appraisals By ATESSA BENEFITS on SEPTEMBER 20, 2012 Retrieved from - http://www.atessabenefits.com/atessa-blog/understanding-the-importance-of-performance-appraisals/

S. M. Towhidul Haque (B.Sc. Civil Engr. BUET, EMBA, IBA, DU)

End of Presentation