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Presented By: Sonia Gautam(002) Seema Yadav(030) Chandni Gautam(031)

Potential appraisal
The potential appraisal refers to the appraisal i.e.

identification of the hidden talents and skills of a person. The person might or might not be aware of them.

Continued
Potential appraisal helps to identify what can

happen in future so that it can be guided and directed towards the achievement of individual and organizational growth and goals. Therefore, potential should be included as a part of the Performance appraisal in organizations.

Purpose of potential appraisal : To advise employees about their overall career

development and future prospects. Help the organization to chalk out succession plan. Motivate the employees to further develop their skills and competencies. To identify the training needs. Showing a bigger picture to the employees. Infusing enthusiasm in the employees to sharpen the abilities.

Techniques of potential appraisal


Self appraisals Peer appraisals Superior appraisals MBO Assessment centers

Assessment Center
An Assessment center is a comprehensive, standardized

procedure in which multiple assessment techniques such as situational exercise and job simulation are used to evaluate the individual employee for a variety of decisions.
Most frequently the approach has been used for

individuals being considered for selection, promotion, placement or special training and development in management.

Tools used
Psychometric Tests
Interviews- background interviews, critical incident/situational interviews

Leaderless Group Discussions


In basket Techniques Management Games

Role Plays
Presentations

Procedure used
Observation and Individual Assessor Rating
Assessors Discussions Consultants Role

CEOS Role

Organizations Using Assessment Center Practice:


SAIL Escorts TISCO Aditya Birla Castrol (India) Cadbury Wipro Siemens

Competency Mapping

COMPETENCIES

BEHAVIORS (actions)

OUTPUTS

ORGANIZATIONAL RESULTS

DEFINITIONS
Hayes (1979)- Competencies are generic knowledge motive, trait, social role or a skill of a person linked to superior performance on the job. Albanese (1989) Competencies are personal characteristics that contribute to effective managerial performance.
UNIDO (2002)- A Competency is a set of skills, related knowledge and attributes that allow an individual to successfully perform a task or an activity within a specific function or job.

Components of competency
Competency has three major components which are as follows:

1)Knowledge:
It refers to the information a person possesses about specific areas, knowledge comprises many factors like memory, numerical ability, linguistic ability, and is, therefore, a complex competency. It can be either: Scientific Knowledge Technical Knowledge Job Knowledge

Continued..
2)Skill:

It represents intelligent application of knowledge, experience, and tools. This is the procedural "know how" knowledge (what one can do), either covert (e.g., deductive or inductive reasoning) or observable e.g. "active listening" skill in an interview.
3)Attitudes: Attitudes are predispositions to other individuals, groups, objects, situations, events, issues etc. Attitudes decide our approach or avoidance behavior. They are normally conceptualized as positive or negative.

Behavior indicators
A Competency is described in terms of key behaviors that enables recognition of that competency at the workplace.

Some key behavior indicators in an employee:


Ability to know what needs to be done or find out (research) and take steps to get it done Ask questions when not sure of what the problem is or to gain more information. Able to identify the underlying or main problem. Shows willingness to experiment with new things.

COMPETENCIES

BASIC

PROFESSIONAL

INTELECTUAL

KNOWLEDGE

MOTIVATIONAL

EXPERIENCE

EMOTIONAL

SOCIAL

EXPERITISE GAINED BY AN INDIVIDUAL EMPLOYEE

ORGANIZATONAL COMPETENCIES
Competencies which are considered essential for all employees regardless of their function or level. Communication, initiative, listening etc. Competencies which are considered essential for employees with managerial or supervisory responsibility in any functional area including directors and senior posts. Specific competencies which are considered essential to perform any job in the organisation within a defined technical or functional area of work e.g. Finance, environmental etc

GENERIC

BASIC

MANAGERIAL

INTELECUAL

FUNCTIONAL/
TECHNICAL

Need for competency mapping


Need for ensuring that competent people are available for performing various critical roles. Downsizing adds to the consequent need to get a lot of thing done with fewer people and thus reduce manpower costs and pass on the advantage to the customer. Recognition that technology, finances, customers and markets, systems and processes can all be set right or managed effectively if we have the right kind of human resources. And recognition of the strategic advantage given by employee competencies in building the core competencies of the organization.

Model of Competency Mapping


A competency mapping model is an organizing framework that

lists the competencies required for effective performance in a specific job, job family (e.g., group of related jobs), organization, function, or process.
Individual competencies are organized into competency models to

enable people in an organization or profession to understand, discuss, and apply the competencies to workforce performance.

Stage 1 Data Gathering & Preparation

Stage 2 Data Analysis

Stage 3 Validation

Study Identified Jobs Identify major categories of skills Identify Probable competencies

Review list of probable Competencies Construct Competency Definitions Assign proficiency levels

Content Validation session Reinforce proficiency of critical competencies Refine competency definitions, if necessary

Performance-related Pay

Pay

Performance-related pay is usually a financial reward

to employees whose work is: a) Considered to have reached a required standard, and/or b) Is above average Performance related pay is generally used where employee performance cannot be appropriately measured in terms of output produced or sales achieved. Like piece-rates and commission, performance related pay is a form of incentive pay. This system is usually used where piece rate systems are not appropriate or able to be used because the work may not be able to be measured in a very precise or accurate way.

Features
Individual performance is reviewed regularly (usually

once per year) against agreed objectives or performance standards. This is the performance appraisal. At the end of the appraisal, employees are categorised into performance groups which determine what the reward will be (if any) The method of reward will vary, but traditionally it involves a cash bonus and/or increase in wage rate or salary.

Objectives of Performance Related Pay


The broad objective of performance related pay is to provide

rewards and incentives to enhance organizational performance through improved individual performance. This objective is achieved through a pay system with the following aims and characteristics. It should: 1) have a strategic objective designed to achieve specific organizational goals 2) focus attention on the important performance issues 3) bring about changes in culture (e.g. team work, customerorientation) or reinforce existing ones. 4) enable the recruitment and retention of competent staff. 5) underline the importance of not only individual performance but also its contribution to team work.

Contd
6) provide higher earnings potential through rewards to

employees, though differentiated in an equitable and consistent way according to their contribution. 7) be flexible in the sense that it contains a variable component which is affected by performance. 8) control labour costs by absorbing the cost of the rewards in the benefits accruing to the organization from improved performance. 9) form part of an overall human resource management system which includes intrinsic rewards.

Why do employers introduce PRP?


to clarify objectives and engage employees with the

organisations goals to motivate employees by linking pay to achievement of targets not length of service to reward achievement and identify under performance; foster teamwork and fairness. to contribute to overall improvements in productivity; to introduce more flexible pay systems or deal with recruitment and retention problems in the case of some employers, to give greater power to managers and weaken trade union influence in bargaining and representation of staff.

Types of Performance Related Pay


1. in cash

2. issuing gift
vouchers

Problems inherent in all PRP schemes

According to the Equal Opportunities Commission, a

well-designed performance-related pay scheme would have the following elements:


1. 2. 3. 4. 5. 6.

Objective setting Communication and understanding of objectives Consideration of performance against objectives Translation of evaluation into performance rating A link between ratings and the determination of pay A separate appeals procedure

Reasons why performance-related pay fails


Inadequate criteria to measure performance, or criteria which are not

easily understood, communicated and accepted. Performance pay should therefore be negotiated. Inappropriate performance appraisal systems in that the objectives of the appraisal system (e.g. where it is intended to identify training needs or suitability for promotion) do not match the objectives of the reward system. In fact, the normal appraisal system should not be used to determine performance pay. The absence of regular feedback on performance. The reward system is not designed to meet the objectives sought to be achieved. The absence of a right mix of extrinsic and intrinsic rewards.

Contd
The lack of an appropriate quantum of pay which

should be subject to performance criteria. This occurs when the amount which depends on performance is too small, or it is too large and therefore the amount placed at risk (when performance is poor) is not acceptable to employees. The absence of periodic evaluations of the scheme. Non-recognition of the fact that performance, especially profit, is sometimes (even often) dependent on factors outside the control of employees e.g. management decisions, exchange rates, recessions

Advantages
Pays the right people the right amounts. Weeds out lazy workers.

Defines the clear objectives of the business.


Retains skills - Employees are attracted and retained as the

company recognizes achievement through the pay system. Increased efficiency through improved company performance. Focuses efforts of employees where the business needs it. Improves individual/team performance. Provides a warning criteria, employers make clear performance criteria they require. Employees seek to achieve this criteria in order to be rewarded with higher pay.

Disadvantages
There may be disputes about how performance is measured and whether an employee has done enough to be rewarded Rewarding employees individually does very little to encourage teamwork It may encourage unhealthy rivalry between managers There is much doubt about whether performancerelated pay actually does anything to motivate employees. This may be because the performance element is usually only a small percentage of total pay.

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