STRATEGIC MANAGEMENT AND PERFORMANCE APPRASAL

Modern performance appraisal techniques are suitable for growth strategies

like expansion diversification joint ventures mergers and acquisition these
strategies help the company to meet competition build competence acquire
strengths enhance market share innovate and create new markets.
CONCEPT: MEANING, NEED AND PURPOSES
• Performance appraisal is the systematic description of an employees job
relevant strengths and weaknesses.
• The basic purpose is find out how well the employee is performing the
job and establishes a plan of improvement.
• Appraisals are arranged periodically according to a define plan
• Performance appraisal is a continuous process in every large scale
organization.
Need for performance appraisal
(i) Provide information about the performance ranks decisions regarding
salary fixation, confirmation promotion transfer and demotion are
taken based on performance in Indian rayon.
(ii) Provide information which helps to counsel the subordinate
(iii) To prevent grievances and in disciplinary active as in the case of
gloom.
Purposes/objectives
(i) To create and maintain a satisfactory level of performance.
(ii) To help the superiors to have a proper understanding about their
subordinates.
(iii) To guide the job change with the help to continuous ranking
(iv) To facilitate fair and equitable compensation based on
performance.
CONTENTS TO BE APPRAISED FOR AN OFFICER’S JOB
(i) Regularity of attendance
(ii) Self expression written and oral
(iii) Ability to work with others
(iv) Leadership styles and abilities
(v) Initiative
(vi) Technical ability knowledge
(vii) Ability to reason
(viii) Creative skill
(ix) Area of suitability
(x) Area of interest
(xi) Integrity
(xii) Level of acceptance responsibility
 (xiii) Quality of suggestion offered for improvement
APPRAISAL SYSTEMS/APPRAISERS
Supervision
Peers
Subordinates
Self appraisal
Users of services/customers
Consultants
When to appraise
PROCESS/METHODS OF PERFORMANCE APPRAISAL
Traditional methods
(i) Graphic rating scales
(ii) Ranking method
(iii) Paired comparison method
(iv) Forced distribution method
(v) Checking methods
(vi) Essay or free form appraisal
(vii) Group appraisal
(viii) Confidential reports
Modern methods
(i) Behaviorally anchored rating scale
(ii) Assessment centre
(iii) Human resource accounting
(iv) Management by objective
(v) Psychological appraisals
How to construct BARS
Step I: Collect critical incidents
Step II: identify performance dimensions
Step III: Reclassification of incidents
Step IV: Assigning scale values to the incident
Step V: Producing the final instrument
Assessment centre
USES OF PERFORMANCE APPRAISAL
• Organization planning based on potentialities of its human resource
• Human resource planning based on weakness, strengths and
potentialities of human resources.
• Organizational effectiveness through performance improvement
• Fixation and reification of salary, allowance incentives and benefit
• Career planning and development and movement of employees
SUCCESSFUL PERFORMANCE APPRAISAL SYSTEM
• Culture of the system
• Employee fully trust the system
• Employees treat the system as a means to evaluate their area of
improvement
• Employees do not see the system as a mere assessment tool
• Openness and transparency in the organization
SUCCESSFUL PERFORMANCE APPRAISAL SYSTEM
• Hiring is only for medium term and person specific appointments
• Employee is demanded to gain knowledge based on corporate strategy
• Motivational methods are shifted towards to work and thought the
intellect and contribution.
• Learning and returning to keep pace with performance objectives
• Compensation is completely based on performance
• Organization design emphasis is on team structure
• Cultural theories are brining in pay, performance and productivity
linkages
USES OF PERFORMANCE APPRAISLS
• Performance improvement:
• Compensation adjustment
• Placement decisions
• Training and development needs
• Career planning and development
• Job design errors
• External challenge
• Feedback human resource
PROBLEMS OF PERFORMANCE APPREISAL
(I) Rating biases:
LIMITATION OF PERFORMANCE APPREISAL
(a) Halo effect
(b) The error of central tendency
(c) The leniency and strictness
(d) Personal prejudice
(e) The regency effect
(ii) Failure of the superior in conducting performance appraisal and post
performance appraisal interviews
(iv) most part of the apiaries is based on subjectivity
(v) less reliability and validity of the performance appraisal technique
(vi) negative rating affect interpersonal relations and industrial relations
system
(vii) influence of external environment factors and uncontrollable internal
factors.
(viii) Feedback and post appraisal interview may have a setback on
production
(ix) Some rating particularly about the potential appraised are purely
based on guess work .
(x) Absence of inter-rater reliability
(xi) The situation was unpleasant in the feedback interview
How to minimize the problem f performance appraisal
• By convening an open meeting with the appraises to discuss the
performance of all employees before during and after performance
review discussions.
• By encouraging every one to comment on each other achievements areas
improvement.
• The appraiser should tell the truth and reality behind the curtains to his
subordinates.
SYSTEM OF PERFORMANCE APPRAISAL
1. Establish performance standards
2. communicate standards/expectations to employee
3. measure actual performance due to the environment influence
4. adjust the actual performance due the environment influence
5. communicate the actual performance to the employees concerned
6. Follow up performance appraisal report.
7. suggest change in job analysis and standard if necessary
The performance appraisal process
Fifth stage is comparing
Sixth stage is comparing the actual performance
Seventh stage is communicating
Eighth stage is suggesting necessary
Suggestions for conducting appraisal interviews
1. Give the employee a few days notice of the discussion and its purpose
encourage the employee to give some preparatory thought to his or her
job performance and development plants. In some cases, have employees
read their written performance evaluation prior to the meeting.
2. Prepare notes and use the completed performance appraisal form as a
discussion guide so that each important topic will be covered. Be ready
to answer questions employees may ask about why you appraisal them
as you did. Encourage your employees to ask questions.
3. Be ready to suggest specific developmental active suitable to each
employee needs when there are specific performance problems,
remember to ‘attack the problem, not the person.
4. Assure your employee that every one on Cessna’s management team is
being evaluated that opportunities will be fully recognized.
5. Make sure that the session is truly a discussion encourage employees to
talk about how they feel they are doing on the job, how they might
improve and what developmental active to your own.
6. When your appraisal differs from the employee discuss these difference
sometimes employee have hidden reasons for performance in a certain
manner or using certain methods this is an opportunity to find out if such
reasons exist.
7. These discussions should contain both constructive compliments and
constructive criticism be sure to discuss the employee strengths as well
as weaknesses. Your employees should have clear picture of how you
view there performance when the discussion concluded.
8. Discuss the future as well as the past plan with the employee specific
changes in performance or specific development activities that will allow
fuller use of potential. Ask what you can do to help.
9. End the discussion on a positive, future improvement oriented notes.
You and your employees are a team working toward the development of
everyone involved.
Legal issues in performance management
• Conduct a job analysis to ascertain the criteria and standard required for
successful job performance.
• Incorporate these criteria and standards into a rating instrument;
• Use clearly defined individual dimensions of job performance rather
than undefined global measure of job performance.
• Communicate in writing the performance standards to employees and
also to these rating them.
• Avoid abstract trait names when using graphic rating scale, unless they
can be defends in terms of observable behaviors;
• Employ subjective supervisory rating as only one component of the
overall appraisal process;
• Train supervisors to use the rating instruments properly;
• Allow appraisal substantial daily catmint with the employee being
evaluated.
Meaning of career planning
*A career path is the sequential pattern of that form a career.
* Career goals are the future positions one strives for as a part of a career.
* Career planning is the process by which one selects career goals and the
path to these goals.
* career planning is the process by which one selects career goals and the
plan to these goals.
* Career development is those personal improvement one undertakes to
achieve a personal career plan.
Need for career planning
Performance management and appraisal
• To attract competent persons and to retain in the organization.
• To provide suitable promotional opportunities.
• To enable the employees to develop and make them ready to meet future
challenges.
• To correct employees placement.
• To reduce employee dissatisfaction and turnover.
• To improve motivation and morale.
Process of career planning and development
• Analysis of individual skills, knowledge, abilities, aptitudes etc.
• Analysis of career opportunities both within and outside the
organization.
• Relating specific jobs to different career opportunities.
• Establishing realistic goals both short-term and long –term.
• Formulating career strategy covering areas of change and adjustment.
• Preparing and implementing action plan including acquiring resource for
achieving goals.
CAREER DEVELOPMENT
(i) needs
(ii) vision
(iii) action
(iv) results
Career development actions
(i) Job performance
(ii) Exposure
(iii) Resignation
(iv) Change the job
(v) Career guidance

Advantages of career planning and development

(i) The process of career planning helps the individual to have the
knowledge of various career opportunities, his priorities etc.
(ii) This knowledge helps him select the career which is suitable to his
lifestyles, preference, family environment, scope for self-
development etc.
(iii) It helps the organization identify internal employees who can be
promoted.
(iv) Internal promotions up gradation and transfers motivate the
employees, boost up their morale and also result in increased job
satisfaction.
(v) It satisfies the employee’s esteem needs.
(vi) It improve employees performance on the job by tapping their
potential ability and further employees growth.
For organizations
(i) Efficient career planning and development ensure the availability
of human resources with required skill, knowledge and talent.
(ii) The efficient policies and practices improve the organizations
ability to attract and
(iii) Proper career planning ensure that the woman and people
belonging to backward communities get opportunities for growth
and development.
(iv) The career plan continuously tries to satisfy the employees
expectations and as such minimizes employees frustration.
Purposes of promotion
(i) To utilize the employee skill knowledge at the appropriate level in
the organizational hierarch resulting in organizational effectiveness
and employee satisfaction.
(ii) To develop competitive spirit and inculcate the zeal in the
employees ready to take up jobs at higher it reduces lab our
turnover.
(iii) To promote a feeling of content with the existing conditions of the
company and a sense of belongingness.
(iv) To build loyalty and to boost morale.
(v) To reward committed and loyal employees.
(vi) To interest in training development programmers and in team
development areas.
 Merit as a basis of promotion
(i) Measurement or judging of merit is highly difficult
(ii) Many people particularly trade union leaders distrust the management
integrity in judgingmerit.
(iii) The techniques of merit is highly difficult.
Seniority as a basis of promotion
a. It is relatively easy to measure the length of service and judge the
seniority.
b. There would be full support of the trade unions to this system
c. Every party trust the management action as there is no scope for
favoritisms and discrimination and judgment.
d. It gives a sense of certainty of getting promotion to every employee and
of their turn of promotion.
e. It minimizes the scope for grievance and conflicts regarding promotion.
Seniority-cum-merit
(i) Minimum length of service and merit;
(ii) Measurements of seniority and merit thought a common factor;
Minimum merit and Benefits of promotion
(iii) seniority
Benefits of promotion
• Promotion places the employees in a position where an employee skill
and knowledge can be better utilized.
• It create and increases the interest of other employees in the company as
they believe that they will also get their turn.
• It create among employees a feeling of content with the existing
conditions of work and employment.
• Promotion improve employee morale and job satisfaction;
• Ultimately it improves organizational health.
Reasons of transfer
(i) To utilize employee skill knowledge etc. where they are more
suitable or badly needed.
(ii) To correct inter-personal conflicts.
(iii) To adjust the workforce of one section/plant in other section/ plant
during lay-off, closure or adverse business conditions or technogical
change.
(iv) To give relief to the employees who are overburdened or doing
complication or risky work for a long period.
(v) To punish the employees who violate the disciplinary rules.
Types of transfers
(i) Production transfer : Transfers caused due to changes in production
(ii) Replacement transfer : transfer caused due to initiation or
replacement of a long standing employee in the same job.
(iii) Rotation transfer : transfers initiated to increate the versatility of
employees.
(iv) Shift transfer : transfer of an employee from one shift to another.
(v) Remedial transfer : transfers initiated to correct the wrong
placements.
Employee initiated transfer
(a) Temporary transfers:
(i) due to ill health or involvement of employees in accidents
(ii) due to family problems like taking care of old parents and
(iii) due to other adios problem like pursuing higher education.
(b) Permanent transfers
(i) due to chronic ill health or permanent disablement caused by
accident
(ii) due to family problem like taking care of dome tic affairs in his
native place.
(iii) In order to relive himself from the monotony or boredom caused due
to doing the some job for years together.
(iv) With a view to search for challenging and creative jobs and
Company initiated transfers
(a) Temporary transfers
(i) due to temporary absenteeism of employees
(ii) due to fluctuation in quality of production and thereby in work
load.
(iii) Due to short vacations.
(b) Permanent transfers
(i) to improve the versatility of employee
(ii) to improve the employees job satisfaction
(iii) to minimize bribe or corruption.
Public initiated transfers
(i) if an employees behavior in the society norms or if he induces in any
social evils.
(ii) Transfer from one place to another result in loss of maydays.
(iii) Company initiated transfers result in reduction in employee
contribution
(iv) Company initiated transfers result in reduction in employee
contribution.
DEMOTION
 (i) Unsuitability of the employee to higher level jobs
(ii) Adverse business condition
(iii) New technology and new methods of operation demand new higher
level skills.
(iv) Employees are demand on disciplinary ground this is one of the
extreme steps and as such organization rarely use this measure.
Demotion principle
(i) Specification of circumstance under which an employee will be
demoted like reduction in operations in disciplinary cases.
(ii) Specification of a superior who is authorized and responsible to
initiate a demotion.
(iii) Specification of basis for demotion like length of service merit or
both.
(iv) It should provide for an open policy rather than a closed policy.
(v) It should contain clear cut norms for judging merit and length of
service.
(vi) Specification of provisions regarding placing the demoted
employees in their original places if the normal conditions are
restored.

PERFORMANACE APPRAISAL
Merit rating also termed as performance appraisal is a process of evaluating
an employee performance of a job in term of its requirements.
FEATUES OF PERFORMANCE APPRAISAL
1. Performance appraisal is a systematic process consisting of a
number of step to be followed for evaluating an employee’s
strengths and weaknesses.
2. It is a systematic and objective description of an employee
strengths and weaknesses in terms of the job.
3. The appraisal is an ongoing and continuous process where the
evaluations are arranged periodically according to a define plan.
It is not a one shot deal.
4. performance appraisal may be formal or informal. The formal
system
(a) Work-related objectives
(i) To assess the work of employees in relation to job requirements
(ii) To improve efficiency
(iv) To carry out job evaluation
(b)Career development objectives
 (i) To assess the strong and weak point in the working of the employees
and finding remedies for weak points through training.
(ii) to determine career potential
(iv) to plan career goals
© Communication
(i) To provide feedback to employees so that they come to know where
they stand and can improve their job performance
(ii) To clearly establish goals what is expected of the employee in terms
of performance and future work assignments
(iii) To provide coaching counseling career planning and motivation to
employees
PERFORMANCE APPARISAL PROCESS
1. Establishing standards
2. Communicating standards to employees
3. Measuring actual performance
4. Comparing actual with standard
5. Discussing reports with employees
6. Taking corrective action.
METHODS OF PERFORMANCE APPRAISAL
TRADITIONAL METHODS
-CONFIDENTIAL REPORT
-GARPHIC SCALES
-STRAIGHT RANKING
-PAIRED COMPARISONS
-GRADING SYSTEM
-FORCED DISTRIBUTION
-CHECK LIST METHOD
-CRITICAL INCIDENT METHOD
-FREE ESSAY METHOD
-GROUP APPRAISAL
-FIELD REVIEW
-NOMINATIONS
MODERN METHODS
ASSESSMENT CENTRE
HUMAN RESOURCE ACCOUNTING
BEHAVIOURALLY
ANCHORED RATING SCALES
MANAGEMENT BY OBJECTIVES
360 DEGREE PERFORMANCE APPRAISAL
A Traditional method
1. Confidential report
2. Graphic scales method
3. Straight ranking method
4. Paired comparisons methods
5. Grading system
6. Forced distribution methods
1. Regularity most least
(i) Always regular
(ii) Informs in advance for absence or delay
(iv) Never regular
(v) Neither regular nor irregular
3. Behaviorally anchored rating scales
1. Generate critical incident
2. Develop performance dimensions
3. Reallocate incidents
4. Scale the incidents
5. develop final instrument
4. Management by objectives (MBO)
1. Set departmental goals
2. Set departmental organizations
3. discuss expected results
4. Performance reviews
5. Provide feed back
SUGGESTIONS TO IMPROVE PERFORMANCE APPARISAL
1. Behaviorally based measures
2. Combine absolute and relative standards
3. on going feedback
4. Multiple raters
5. Selective rating
6. trained appraisal
7. peer evaluations
8. post-appraisal interview
9. Rewards to accurate appraisers
ESSENTIALS OF AN EFFECTIVE APPREISAL SYSTEM
1. Mutual trust and confidence
2. Reliability
3. Validity
4. Specific objectives
5. Standardization
6. Training to appraisers
7. Job relatedness
8. Feedback
 9. Individual difference
10.post appraisal interview
11.review and appeal
LEGAL AND ETHICAL ISSUAL IN PERFORMANCE APPRAISAL
Legally defensible appraisal procedures
1. Every organization should have a formal standardized performance
appraisal system. All the HR decision should be based on this system.
2. there should be uniformity in the application of performance appraisal
process for all the employee within a job group. The decisions based
on these performance appraisal can however, be monitored for
difference according to sex, caste, religion or age of the employee.
3. All the employees should be given opportunity to review their
appraisal results.
4. there should be a formal appeal process whereby an employee can
question the rating given by the appraisal.

Legally defensible appraisal content

1. Job analysis should be conducted to establish the performance appraisal
contents.
2. Appraisal based on traits should be avoided unless these can be defined
in term of observable behavior
3. Objectively verifiable performance data turnover productivity etc.
should be used as far as possible.
4. the performance dimensions should be assigned weight to reflect their
relative importance in calculating the composite performance score.
5. subjective rating should be used only as one component of the overall
appraisal process.
Legally defensible documentation of appraisal result
1. A written documented record of all information and reason bearing on
any HR decisions should be properly maintained courts always condemn
informal performance appraisal practices that do not have
documentation.
2. Written documented for extreme rating should be maintained and it must
be consistent with numerical ratings.
3. All the raters should follow consistent documentation requirements.
PERFORMANCE APPARISAL OF EXECUTIVES MANAGERS
-Return on capital employed
- degree of growth and expansion
- labour productivity indices
-contribution to community development
- Clarity about organizational goals and policies
Middle level manager
-Departmental/team performance
- cost per unit
- rational use of equipment and facilities
- Coordination among supervisions
Lower level manager
-Quantity and quality of output
- Lab our cost per unit
- Material cost per unit
- Employee turnover and absenteeism
-Number of accidents in a given period