INDEX

1. Concept of performance appraisal 2. Types of performance appraisal 3. Concept 720 degree performance appraisal 4. The need of 720 degree performance appraisal in todays business world 5. Dimensions of 720 degree appraisal 6. Benefits of 720 degree appraisal 7. Effects of 720 degree review 8. Objectives of the study 9. Importance of 720 degree performance appraisal 10. Limitations of 720 degree 11. Scope of the study 12. Advantage of the 720 degree performance appraisal 13. Disadvantage of 720 degree appraisal 14. Problems of 720 degree appraisal 15. How to avoid problems 16. Difference between 360 degree and 720 degree appraisal 17. Implications of the study 18. Conclusion

720 degree Performance Appraisal

Concept of performance appraisal
Evaluate what you want -- because what gets measured gets produced ~ James A. Belasco Performance appraisal is a concept that started in the early 20thCentury. It is the process of obtaining, analyzing and recording information about an employee to evaluate and improve their performance. Performance appraisal is evaluated in terms of Quality, quantity, time and cost and also analyses the value that the employee adds to the goals of the organization. There are different methods of performance appraisal used based on the type of organization, size of the organization and also the period when it is used. 720 degree performance appraisal is one of the most recently introduced concepts. As the name suggests, 720 degree performance appraisal is the evaluation of the performance of an employee from all the aspects and giving timely feedback to ensure that the person is able to achieve the set goals before the next appraisal. A performance appraisal, employee appraisal, performance review, or (career) development discussion[1] is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor.[2] A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on considerations other than productivity alone. According to Flippo a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future. It is a powerful tool to calibrate, refine and reward the performance of the employee. It 2

helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees. The success of an organization depends on the performance of the employees and it is the human tendency to judge everything and everyone around them. If there are no fixed standards of judging they will start judging based on informal standards that can create negativity and impact the performance of the employee and in turn, the organization. Hence, it is necessary that we set the right standards to judge the performance of the employees. The major setback in the previous methods of appraisal was that it did not guide the employee after the appraisal hence the 720 degree appraisal was introduced when the employees performance is measured, analyzed and targets are set in the first appraisal and after a short period his performance is measured again and proper feedback and guidance is given to ensure that the employee achieves the target.

Types of performance appraisal

1. Critical incident method This format of performance appraisal is a method which involves identifying and describing specific incidents where employees did something really well or that needs improving during there performance period. 2. Weighted checklist method In this style, performance appraisal is made under a method where the jobs being evaluated based on descriptive statements about effective and ineffective behavior on jobs. 3. Paired comparison analysis 3

is form of performance appraisal is a good way to make full use of the methods of options. There will be a list of relevant options. Each option is in comparison with the others in the list. The results will be calculated and then such option with highest score will be mostly chosen. 4. Graphic rating scales This format is considered the oldest and most popular method to assess the employees performance. In this style of performance appraisal, the management just simply does checks on the performance levels of their staff. 5. Essay Evaluation method In this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of staffs behaviors. Essay evaluation method is a non-quantitative technique. It is often mixed with the method the graphic rating scale. 6. Behaviorally anchored rating scales This formatted performance appraisal is based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of working performance. The form is a mix of the rating scale and critical incident techniques to assess performance of the staff. 7. Performance ranking method The performance appraisal of ranking is used to assess the working performance of employees from the highest to lowest levels. Managers will make comparisons of an employee with the others, instead of making comparison of each employee with some certain standards. 8. Management By Objectives (MBO) method MBO is a method of performance appraisal in which managers or employers set a list of objectives and make assessments on their performance on a regular basis, and finally make rewards based on the results achieved. This method mostly cares about the results achieved (goals) but not to the way how employees can fulfill them.

9. 360 degree performance appraisal The style of 360 degree performance appraisal is a method that employees will give confidential and anonymous assessments on their colleagues. This post also information that can be used as references for such methods of performance assessments of 720, 540, 180 10.Forced ranking (forced distribution) . In this style of performance appraisal, employees are ranked in terms of forced allocations. For instance, it is vital that the proportions be shared in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one 11. Behavioral Observation Scales The method based on the scales of observation on behaviors is the one in which important tasks that workers have performed during their working time will be assessed on a regular basis. So these are the types of performance appraisal. 1.1 CONCEPT

OF 720 DEGREE PERFORMANCE APPRAISAL

720 degree performance appraisal, is the latest appraisal method that has been introduced in New Economy companies. Accurately and objectively measuring the performance of an employee is the most difficult part of the Performance appraisal process. Different methods are used for Performance appraisal that includes: Critical incident method, weighted checklist method, paired comparison analysis, graphic rating scales, essay evaluation method, behaviorally anchored rating scales, performance ranking method, Management by Objectives (MBO) method, 360 degree performance appraisal method, Forced ranking and Behavioral observation scales. 720 degree performance appraisal is an integrated method of performance appraisal where, the performance of an employee is evaluated from 360 degrees (Management, Colleagues, Self and also customers) and timely feedback is given and performance is evaluated again based on the targets that are set. Hence, 720 degree performance appraisal can be stated as twice 360 degree performance appraisal: once when 5

the appraisal is done and the targets are set and he second where the feedback is given and the boss gives tips to achieve the goals. Hence, there is a pre and a post round of feedback. Considered as all round appraisal, the 720 degree performance appraisal system gives an employee more than feedback from one person. This appraisal gives the employee a lot of feedback generally from anywhere from 5 to 8 people to provide the employee with an all round assessment of his or her on the job performance. 720 degree for two round of feedback (a pre and post ) or a feedback approach which is done again after 9 to 12 months.

720 CONTAINS
1. Key skill / capability type. 2. Skill components/ elements. 3. Question number (purely for reference and ease of analysis) 4. Specific feedback question. 5. Tick box and grade box (ideally a, b, c, d or excellent, good, not good, poor or rate out of 5 to 10.)

720 degree performance evaluation

1. The 720 degree review starts with a review of the leaders contribution to the business, competence and other factors. 2. Next, major customer are identified and representatives asked to be part of the review. 3. After programmer training , the 720 degree services provider, interviews the customer to determine the quality of the relationship with the executive. 4. All internal and external input is complied , analyzed and presented to the executive. 5. The executive , with support from the 720 degree service provider , develops measurable goals and a detailed action plan to make changes.

1.2 THE NEED OF 720 DEGREE PERFORMANCE APPRAISALS FOR TODAYS BUSINESS WORLD

As Organizations evolve and new techniques make work complicated it also becomes necessary to have a complex and integrated appraisal system. As organization grows and become diverse the expectation from each employee becomes high in turn, the employees expectation from the employer also increases. The main need of 720-degree performance appraisal is the improvement of the performance of the people in their jobs and to ensure that the expectations of the employer, employee and the customers are met. The main need of 720-degree performance appraisal can be summarized as follows: 720-degree performance appraisal method is more development focused than performance alone, and supplements training and development functions in a better way. Provide information about the performance ranks. Assist in taking decisions regarding salary fixation, confirmation, promotion, transfer and demotion. Provide timely feedback about the performance, set targets and monitor the performance based on the targets set. Helps to check the effectiveness of personnel procedures and practice i.e. validation. It is needed to ensure that employees reach organizational standards and objectives. To discover the work potential and to understand the areas where training is required to guide the employees to perform their best. To understand the expectations of the employees and prevent grievances and in disciplinary activities. Provide information to diagnose deficiency in the employee regarding skill, knowledge, determine training, and prescribe the means for employee growth and information for correcting placement. Set realistic target, monitor the performance and provide timely feedback to ensure that the performance is enhanced. These critical competencies are essential to assist the executives and managers to be able to lead these organizations toward successful implementation of strategic changes. 1.3 DIMENSIONS OF 720-DEGREE PERFORMANCE APPRAISAL 7

All the current IT organizations aim at achieving higher rate of employee satisfaction and transparency in the working environment. In order to achieve the above goals, 720 degree performance appraisal would be a vital tool as it is used to appraise the performance of an employee from different dimensions and helps to overcome the barriers of bias, prejudice and discrimination. The performance is appraised from 5 dimensions and feedback or the appraisal meeting is conducted twice (pre and post feedback) to ensure the efficient performance of the employee. Including the pre and the post feedback, that plays a vital role, the 720 Degree performance appraisal has 7 phases. PRE APPRAISAL FEEDBACK This is the first appraisal step that is done after the feedback is collected from the different dimensions or people with whom the employee would interact. In this step, the performance is evaluated, targets are set and feedback or training is organized to help the employee achieve the target. b) SELF APPRAISAL The employee is given a questionnaire and asked to evaluate his performance and through this method, the employee gets an opportunity to express his thoughts and his valuation of strengths, weakness and judge his performance. c) PEERS/COLLEAGUES APPRAISAL The feedback from the peers or colleagues is important as it helps to understand the ability of the employee to work as a team, cooperate, co-ordinate with others and bring out the best. d) CUSTOMER APPRAISAL In order to survive in the current competitive market, Organizations aim at achieving high customer satisfaction. Customer feedback helps to analyze the customer point of view and help to improve the person and the Organization.

e) SUB-ORDINATES APPRAISAL The feedback of the sub-ordinates is essential to analyze the organizing skills of the employee and to understand his abilities like communication and motivating abilities, ability to delegate the work, leadership qualities and way of handling responsibilities. f) MANGERS/SUPERIORS APPRAISAL In this, the performance, responsibilities and the attitude of the employee is evaluated by the Superiors or Managers. g) POST APPRAISAL FEEDBACK It is this step that makes the 720-degree performance appraisal different and better than the 360-degree performance appraisal method. In this step, the performance is evaluated based on the target set in the Pre appraisal and feedback is given. Timely feedback and guidance helps to make the employee improve his performance.

1.4 BENEFITS OF 720-DEGREE PERFORMANCE APPRAISAL

720 Degree performance appraisal will help in creating a synergetic work environment and will help to bring out the best of each employee. The other benefits of the 720 degree performance appraisal are as follows a) It helps in better analysis and improved feedback from different dimensions b) Helps to develop a better and co-operative team c) Reduces the appraisal barriers like prejudice, bias and discrimination d) Customer feedback is valued do better customer service and satisfaction can be obtained e) Encourages transparency and feeling of treated justly

EFFECTS OF 720 DEGREE REVIEW

Performance goals are aligned with customers true expectations. Customers internal evaluators, venders and executive being evaluated are coached on the purpose, process and needed outcomes before beginning. For a 720 degree assessment, collect information not only from inside the company but from out side groups. External assessors might include investors, customers or suppliers. These groups are important because it is in their eyes that the organizations intangible value matters most.

OBJECTIVES OF THE STUDY

The following are the objectives of the study: To study the awareness level of the Employees and Managers on 720 degree performance appraisal method. To find whether the 720 degree performance appraisal method is in vogue in the selected IT companies. To suggest a scheme to create the awareness and for effective practice of the 720 degree performance appraisal method.

IMPORTANCE OF 720 DEGREE PERFORMANCE APPRAISAL

720 degree appraisal system provide alternatives to the traditional appraisal system. It is useful in learning organizations. It involves the use of more than one evaluator, which in turns mean that the different components of the appraisal system, which is based on a unitary system of evaluation. The 720 degree appraisal mechanism are more reliable, focused and consistent. They are capable of reassessment which is the opposite of what happens with the traditional system. The 720 degree guarantee confidentiality , unlike the traditional appraisal system. 10

LIMITATIONS OF THE STUDY

The sample of New Economy companies was taken from only one city. Hence the Appraisers-respondents and Appraiser-respondents are from one city based new economy companies. Subjective views of the appraisers and the appraise respondents Time constraint

SCOPE FOR FURTHER RESEARCH

The following areas are identified for further research: Analytical study on the opinions of the CEOs and top management on 720 Degree performance appraisal method and its implementation. A sample study using the laboratory method to have a practical understanding. Development of cases on 720 Degree performance appraisal method. Research on creating awareness about the on 720 Degree performance appraisal method.

ADVANTAGES OF 720 DEGREE PERFORMANCE APPRAISAL

11

Improved feedback from more sources. Team development. Personal and organizational performance development. Training need assessment. Improve customer services.

DISADVANTAGES OF 720 DEGREE PERFORMANCE APPRAISAL

This question was asked to the Appraisers to understand what they consider as the greatest dis-advantage of the 720 Degree performance appraisal method. 85% of the appraisers consider that 720 Degree performance appraisal method is a time consuming process. 10% of the appraisers consider that the monetary requirement is higher for 720 Degree performance appraisal method as appraisal/feedback has to be done twice. 5% of the appraisers consider that there might be quality problem as all the 7 dimensions of appraisal in 720 Degree performance appraisal method might not be accurate. The appraisers consider the 720 Degree performance appraisal method as a time consuming process. Failure to connect the process. Focus on negative and weakness.

PROBLEMS IN 720 DEGREE PERFORMANCE APPRAISAL

12

The Industries in India are broadly classified into two: Old Economy Companies New Economy Companies In the New Economic companies, the practices are ultra-modern in all functions of management. Therefore, the authors of this paper write to find whether the employees and managers (appraisers) are aware of the concept of 720 degree performance appraisal method. If yes, do they practice it for the performance evaluation? The opinion of the employees vis--vis appraisers on the need and importance of this method as far as the performance evaluations, as it is the need of the hour.

Errors of central tendency. Leniency and strictness biases. Personal prejudice. Primary effect / first impression. Regency effect. Lack of rater preparedness. Sampling error. Stereotyping in this appraisal.

HOW TO AVOID PROBLEMS IN 720 DEGREE PERFORMANCE APPRAISAL

Understand the potential problem and solutions. Use the right appraisal tool. Each tool has its on pros and cons. Train supervisors to reduce rating errors such as halo effect, leniency and central tendency. Have raters compile positive and negative critical incidents as they occur.

13

DIFFERENT

BETWEEN

360

DEGREE

AND

720

DEGREE

APPRAISAL SYSTEM

The 720 degree appraisal system is more focused on the customers feedback on specific position in the organization such as directors, managers and other higher or mid level managers and is therefore reliant on the voice of external customers while the 360 degree appraisal system is focused on the internal customers feedback on employee performance.

The 720 degree appraisal system is more focused on management / higher level staffs while the 360 degree system is general. The 360 degree has a single evaluation cycle while the 720 degree has dual evaluation cycle.

IMPLICATIONS OF THE STUDY AND CONCLUSION

The common answer (appraisers or employee) about the need for appraisal is that the Appraisal process is necessary. The most important purpose or goal of the appraisal is Robert Bacal, M.A.). It is an important and necessary process however; it is a process that can make both the sides apprehensive. It is obvious that the appraised in apprehensive however; the appraiser is also generally not very happy because he needs accurate data and if the appraised objects or raises any question the appraiser should have the information ready and hence the appraiser is also defensive. Stating about the need for change and the problems of the traditional appraisal method, Susan M. Heath field, in her article, Performance Appraisals Don't Work states that Appraisers and Appraised are uncomfortable for the process of performance appraisal. Hence it is necessary to have a 14 to improve performance in the future, (What is The Point of Performance Appraisal By

proper organized and well recorded method for performance appraisal so that the appraiser and the appraised will have a synergetic environment. In a performance management system, feedback remains integral to successful practice, (Susan M. Heath field). 720 Degree performance appraisal is a method that gives paramount importance to feedback as there is a pre and post feedback session. The pre and post feedback session is a process that helps the appraiser and the appraised equally. Andrew E. Schwartz explains about this dual benefit in his article, The How-Tos of Effective Performance Appraisal. He states, All employees need periodic discussions with their supervisors to determine the effectiveness of their performance. In addition, appraisals help supervisors insure that their own goals are being met. In Ben Dattners article about performance appraisal, he states that the roles of performance appraisal include, Giving candid and constructive feedback and Following up to ensure that the system works. It is in this aspect that 720 Degree performance appraisal method is effective and would be successful as this is the method that includes both giving candid feedback and follow up (post feedback). From the study it has been clear that most of the selected respondents are not happy with the current appraisal method hence, it is necessary to implement a objective From the above sample study, it is clear that most of the appraisers and appraise respondents are not aware of the 720 Degree performance appraisal method. It is also evident that most of the employees are not satisfied with the current appraisal methods used in their organizations and consider personal bias as a major problem in the current appraisal methods. The 720 Degree performance appraisal method as an objective method that cannot be influenced by personal bias and a method that suits the new economy companies as it gives feedback and follows up to ensure that the appraised reach the goal.

15