SANSKRITI SCHOOL OF BUSINESS Human Resource Management (PGDM 2011-2013) SEMESTER-II

QUIZ 2 DATE-8/4/2012 TIME-10 MINUTES MARKS-10 WEIGHTAGE-5%

All questions are compulsory and carry equal marks:1. 2. 3. 4. 5. Write one reason why appraise performance? Differentiate between paired comparison method and forced distribution method? (2) List the basic factors in determining pay rates? (2) Explain two reasons why incentive plan fails?(2) State two problems to be avoided in appraising performance? (2)

Answer 1: Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does. 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 helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. Performance appraisal is very important for the following:

To review the performance of the employees over a given period of time. Helps to strengthen the relationship and communication between superior subordinates and management employees. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To provide feedback to the employees regarding their past performance. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

Answer 2: Difference between Paired Comparison and Forced Distribution Method: Paired comparison method helps make the ranking method more precise, it ranking employees by making a chart of all possible pairs of thee employees for each traits and indicating which is the better employees of the pair. Every traits comprising by quality of work, quantity of work and so on and compare every subordinate with every other subordinate. Forced distribution method is similar to a grading on a curve, it is a predetermine and percentages of rates are placed in various performance categories.

Answer 3: Factors Determining Pay Rates: Employee compensation: All forms of pay or rewards going to employees and arising from their employment. There are two kinds: I. Direct financial payments Pay in the form of wages, salaries, incentives, commissions, and bonuses. Also pay for performance.piecework is an example. II. Indirect financial payments Pay in the form of financial benefits such as insurance.

Answer 4: 1. Most companies dont address all issues related to performance and human motivation. 2. Most companies lack the knowledge or will to create properly constructed programs. 3. There is no pre-program evaluation that leads to program-objective setting, ongoing measurement, and post-program evaluation.

Answer 5: Two Problems in Performance Appraisal: 1. Problems with personal prejudice: If the rater dislikes any employee, he may rate them at the lower end and this may distort the rating purpose and affect the career of these employees. 2. Problems with halo effect: To minimizing the halo effect, you should appraise all the employees by one trait before going to rate on the basis of another trait. A person outstanding in one area tends to receive outstanding or better than average ratings in other areas as well, even when such a rating is undeserve.