HR Project On Performance Management

[HUMAN RESOURCE DEVELOPMENT] August 21, 2009
PROJECT REPORT
ON
PERFORMANCE MANAGEMENT
IFIM B-SCHOOL, BANGALORE
Section B, Group 4
Group Members:
Names: Roll No.
1. Anish Savio 04
2. Avesh Arya 09
3. Rohit Mehta 14
4. Poulmi Banerjee 19
5. Preeti Jaiswal 24
6. Ritesh 29
7. Shweta Rani 24
8. Seema Kumari 39
9. Sourabh Nayak .S 44
10.Tanishtha Basu 49
11.Vaibhav T.S 54
12.Yatindra Singh 59
Institute Of Finance And international Management Page 1

CONTENTS
ACKNOWLEDGEMENT
……………………………………………………………………………………..3
INTRODUCTION…………………………………………………………………………………
……………...
DECISION
…………………………………………………………………………………………………
ILLUSTRATION/
EXAMPLES………………………………………………………………………….
CONCLUSIONS…………………………………….
REFERENCE……………………………

Acknowledgement
Several individuals were extremely instrumental in allowing us to

create this case analysis. I am indebted to Dr. Mousumi S Bhattacharya for encouraging us to
start this project. Numerous HR managers and corporate from Bangalore have given their
best of knowledge regarding the subject matter of the case analysis. We, the group members
are thankful to them. We also received constructive feedbacks from our batch mates and old
students of this institution in preparing this case study a relevant one.

INTRODUCTION
PERFORMANCE MANAGEMENT
DEFINITION, FOUNDATION AND SCOPE
What is Performance Management?
Systematically managing all the people in an organization, for innovation, goal focus,
productivity and satisfaction--it is a goal- congruent win - win plan
 Armstrong and Baron define performance management as a “strategic and integrated

approach to delivering sustained success to organizations by improving performance
of people who work in them and by developing the capabilities of teams and
individual contributors
 Performance management is that part of an organization’s people-related function,

which is performed by those directly managing the people- the HR managers.
FOUNDATION OF PERFORMANCE MANAGEMENT:
Why organizations introduce performance management?
The IRS 1998 survey elicited the following reasons from few organizations for introducing
performance management:
ORGANISATION REASONS GIVEN
American Express Services Europe Cultural change
Edinburgh International Conference Centre Quality-providing the
customer with what the

customer wants.
British Medical Association Customer Service
Natural History Museum Link pay to performance
Jamount UK Improve performance and
Identify training needs.
London Borough of Bromley Feedback from staff
SCOPE
The scope of performance management has expanded to policy and strategy at the corporate
level. There are five major groups of interacting factors that determine performance at the
corporate level. These are:-
 Corporate strategy and objectives

 Technology
 Organizational structure and system
 Human Resource development and
 Organizational climate and culture
THE PERFORMANCE - MANAGEMENT CYCLE
Plan
Review Act
Monitor

Performance Managed Organizations are likely to have the following

characteristics:
 Measurable performance targets
 Manage-learning linked with organizational goals on the one hand and with
career development on the other
 Pre-eminence of intrinsic needs of managers without neglecting their extrinsic

needs
 Ownership of performance management by line management rather than the

personnel function
Key to Performance Management:
Building organizational capability and successful implementation of
 High - commitment management practices is a key managerial responsibility
 High-performance management practices require consistent leadership attention,

while time and attention are the scarcest of resources in most organizations
 When people (individuals and teams) know and understand what is expected of them,
and have taken part informing these expectations, they will use their best endeavors’
to meet them.
 The capacity to meet expectations depends on the levels of capability that can be
achieved by individuals and teams, and the processes, systems and resources made
available to them by the organization.
Discussion
A full cycle of performance management consists of Planning, Monitoring, Developing,

Appraising, and Rewarding.

The management or superiors have the authority to redesign and reassign an employee’s
work based on their assessment of individual and team performance.
What is Performance?
Performance is degree of accomplishment of the tasks or how well an individual is fulfilling

the job requirements. Performance evaluation or Appraisal is the personnel activity by means
of which the organization determines the extent to which the employee is performing the job
effectively.
Managing this whole process of evaluation is called Performance Management, which is

performed by those directly managing the people- the HR managers.
Performance Management and People Management:
 Performance management is that part of an organization’s people-related function, which

is performed by those directly managing the people
 Within any organization, there are at least two levels of effort, that
 Concern the performance of its people
 And optimize individual and collective output
 Effort at the organizational level, which determines the organization’s internal

environment
 Effort at the managerial level, which constitutes core of the leader-manager role--- what
each manager does to supervise her managers
Performance Standards:
Organizations need performance standards, at the level of individual managers as well as at

the project or functional or programmatic levels
 Organizations want to standardize precise expectations
 Managers need equitable and consistent standards for their individual

performance, comparable to others in the organization, to be monitored or
assessed by

 Managers expect that managers everywhere in the organization will use

identical-at least similar---standards to measure the performance of competing
positions
Steps to be followed while Introducing a Good Potential Appraisal

System:
Role Descriptions:
Organizational roles and functions must be3 defined clearly. To this end, job description must
be prepared for each job.
Quality needed to perform for each job:
Based on job descriptions, the roles to be played people must be prepared.
Rating Mechanisms:
Besides listings the functions and qualities, the potential appraisal system must list
mechanism of judging the qualities of employees such as:
1 Rating by others: The potential of a candidate could be rated by the immediate

supervisor who is acquainted with the candidate’s work in the past, especially his
technical capabilities.
2 Test: Managerial and behavioral dimensions can be measured through a battery of
psychological tests.
3 Games: Simulation games and exercises could be used to uncover the potential of a
candidate (role play, business games, assessment centre).
4 Records: Performance records and ratings of a candidate on his previous jobs could be
examined carefully on various dimensions such as initiative, creativity, risk taking
ability etc., which might play a key role in discharging his duties in a new job.
 Organizing the system
After covering the above preliminaries, the HR manager must set up a system that will
allow the introduction of the scheme smoothly incorporating answers to some
complex questions such as:
i. How much weightage to accord to merit in place of seniority in promotions?

ii. How much weightage to accord to each of the performance dimensions-

technical, managerial, behavioral qualities?
iii. What are the mechanisms of assessing the individual on different indicators of
his potential, and with what degree of reliability?
 Feedback
The system must provide an opportunity for every employee to know the results of his
assessment. “He should be helped to understand the qualities actually required for
performing the role for which he thinks he has the potential, the mechanisms used by the
organizations to appraise his potential and the results of such an appraisal”.
Employee evaluation Concept:
In many organizations, two evaluation processes exist side by side: the formal and the
informal.
Supervisors often think how well employees are doing; this is informal system.
Formal performance evaluation is a system set up by the enterprise to regularly and

systematically evaluate employee performance. This evaluation method deals with the
various methods and techniques, which can be usually referred as Performance Appraisal.
- To design a system for appraising performance, it is important to first define what is

meant by the term Work Performance, although it depends on combination of one’s
ability, effort and opportunity, it can be measured in terms of outcomes or results
produced.
Performance Appraisal: Definition
Performance appraisal is a method of evaluating the behavior of employees in the work spot,
normally including both the quantitative and qualitative aspects of job performance. It’s a
systematic and objective way of evaluating both work related behavior and potential
employees.
Features:
When Performance appraisal is implemented correctly, it can affect corporate performance

and the bottom line.
It mainly involves three steps:

a) Setting work standards

b) Assessing employee’s actual performance relative to these standards
c) Offering feedback to the employee so that he can eliminate deficiencies and improve
performance in course of time.
Benefits of performance appraisal:
Employer perspective [Administrative uses]
 Despite imperfect measurement techniques, individual differences in performance can

make a difference to company performance.
 Documentation of performance appraisal and feedback may be required for legal

defense.
 Appraisal offers a rational basis for constructing a bonus or merit system.
 Appraisal dimensions and standards can help to implement strategic goals and clarify
performance expectations.
Employee perspective [developmental purposes]
 Individual feedback helps people to rectify their mistakes and get ahead, focusing
more on their unique strengths.
 Assessment and reorganization of performance levels can motivate employees to

improve their performance.
What is to be appraised?
The content to be appraised is determined on the basis of job analysis. Usually it

comprises of:
 Behaviors, including observable physical actions, movements
 Objectives which measure job related results
 Traits which are measured in terms of personal characteristics
Who will appraise?
 Supervisors
 Peers

 Subordinates
 Users of services
 Consultants
 Self appraisal
THE PERFORMANCE APPRAISAL PROCESS:
A) Establish performance Standards
B) Communicate the standards
C) Measure actual performance
D) Compare actual performance with standards and discuss the appraisal
E) Taking corrective action, if necessary.
Methods of Performance Appraisals

Individual Evaluation Methods:
1) Confidential report:-
It is a descriptive report prepared, generally at the end of every year, by the

employee’s immediate superior. It mainly highlights the strengths and weakness of
the subordinates. E.g.:- Government organizations
The report usually has the impression of the superior about the subordinate. Since
the report is generally not made public, no feedback is available to the appraise,
rectification of mistakes, if any, is not possible.
The appraise is not very sure about why his ratings have fallen despite his best efforts.
2) Essay Evaluation:
In Essay technique of evaluation, the evaluator is asked to describe the strong and
weak aspects of the employee’s behavior. In some organization this technique is only
one used; in others, the essay method is combined with any other form, such as
graphic rating. In this case, the essay summaries the scale, elaborates on some of the
ratings, or discusses added dimensions not o the scale. In most of the cases there are
guidelines on the topics to be covered, purpose of the essay, and so on. The essay
method can be used by evaluators who are superiors, peers, or subordinates of the
employee to be evaluated.
3) Critical Incidence techniques:
In this method, managers prepare lists of statements of very effective and very
ineffective behavior of the employee. These critical incidents or events represent the
outstanding and poor behavior of employees on the job. The manager maintains logs
of each employee, whereby he periodically records critical incidents of the workers
behavior. At the end of the rating period, these recorded critical incidents are used in
the evaluation of the workers performance. This method is most likely to be used by
superiors than peers or subordinate evaluations.
4) Checklists and weighted checklists:
Another simple type of individual evaluation method is the checklist. In its simplest
form, the checklist is a set of objectives or descriptive statements about the employee
and his behavior. If the rater believes that the employee possesses a trait listed, the
Rater checks the items; if not, the rater leaves it blank. A rating score from the
checklist equals the number of checks.
A more recent variation of the check list is weighted checklist. Under this, the value of
each question may be weighed equally or certain questions may be weighted more
heavily than the others. Checklists and weighted checklists can be used by evaluators
who are superiors, peers, or subordinates or by a combination.
5) Graphic rating scale:
The mostly widely used performance evaluation technique is a graphic rating scale. In
the technique, the evaluator is presented with a graph and asked to rate employees
on each of the characteristics listed. The number of characteristics rated varies from
few to several dozen. A factor analysis of the results indicates that only two traits
were being rated: quality of performance and ability to do the present job.
The ratings can be in a series of boxes, or be on a continuous scale (0-9) or so. In the
latter case, the evaluator places a check above descriptive words ranging from none to
maximum. Typically, these ratings are then assigned points.
For E.g. Outstanding may be assigned a score of 4 and unsatisfactory a score of 0. Total
score are then computed. In some plans, greater weights may be assigned to more
important traits. Evaluators are often asked to explain each rating with a sentence of
two.
6) Behaviorally anchored rating scales:
Another technique which essentially is based on the critical incident approach is the
behaviorally anchored rating scale (BARS). This is a new, relatively infrequently used
technique.
Supervisors give descriptions of actually good and bad performance, and personnel
specialists group these into categories (5-10 is typical).As with weighted checklists, the
items are evaluated by superiors (often other than those who submitted the items).A
procedure similar to that for weighted checklists is used to verify the evaluations
(outstanding for example) with the smallest standard deviation, hopefully around 1.5
on a 7-point scale. These items are then used to construct the BARS.
7) Forced choice method:

The forced choice method of evaluation was developed because other methods used
at the time led to a preponderance of higher ratings, which made promotion decisions
difficult. In forced choice, the evaluator must choose from a set of descriptive
statements about the employee. The two-, three-, or four- statement items are
grouped in a way that the evaluator cannot easily judge which statements apply to
the most effective employee. The primary purpose of the forced choice method is to
correct the tendency of a rater to give consistently high or low ratings to all the
employees.
8) Management by objectives (MBO):
Another individual method in use now a day is MBO. In this system, the supervisor
and the employee to be evaluated jointly set objectives in advance for the employee
to try to achieve during a specified period. The method encourages, if not requires,
them to phrase these objectives primarily in quantitative terms. The evaluation
consists of a joint review of the degree of achievement of the objectives. This
approach combines the superior and self-evaluation systems.
Multiple –Person Evaluation Techniques:
In individual evaluation methods is used to evaluation of employees one at a time. Three

techniques that have been used to evaluate an employee in comparison with other
employees are ranking, paired comparison and forced distribution.
Ranking method:
In ranking method, the ranking of an employee in a work place is done against that of
another employee. The relative position of each employee is expressed in terms of his
numerical rank. Here the evaluator is asked to rate the employees from highest to
lowest on some overall criterion. It is very easy to rank the best and the worst
employees, it is very difficult to rank the average employees. In this approach the
evaluators pick the top and the bottom employees first, then select the next highest
and next lowest, and move towards the middle.
Paired Comparison:
This approach makes the ranking method easier and more reliable. First the names of
the persons to be evaluated are placed on separate sheets (or cards) in predetermined
order, so that each person is compared to all others to be evaluated. The evaluator
then checks the person he feels is the better of the two on a criterion for each

comparison. Typically the criterion is overall ability to do the present job. The number
of times a person is preferred is tallied, and this develops an index of the number of
preferences compared to the number being evaluated.
These scores can be converted into standard scores by comparing the scores to the
standard deviation and the average of all scores. The method can be used by
superiors, peers, subordinates, or some combination of these groups.
Forced Distribution:
Under this system, the rater is asked to appraise the employee according to a
predetermined or fixed distribution scale. The rater’s bias is sought to be eliminated
here because workers are not placed at a higher or lower end of the scale. Normally,
the two criteria used here for rating are the job performance and promo ability.
Further, a five-point performance scale is used without mention of descriptive
statements. Workers are placed between the two extremes of ‘Good’ and ‘Bad’
performances such as outstanding merit may be placed at top 10% of the scale. The
rest may be placed as 20%- good, 40%- outstanding, 20%- fair, and 10%- poor. To be
specific, the forced distribution method assumes that all top grade workers should go
to the highest 10% grade; 20% employees should go to the next highest grade and so
on..
Apart from job performance as the criterion, another equally important factor in this
method is promo ability. Employees may be classified according to their promotional
material, may/may not be promotional material and quite unlikely promotional
material.
One Strong positive point in favor of the forced distribution method is that by forcing
the distribution according to predetermined percentages, the problem of making use
of different scales is avoided and tends to eliminate rater bias. The limitation of this
method in salary administration is that it may result in low morale, low productivity
and high absenteeism.
Other methods:-
Other methods include: Group Appraisal method, Human Resource Accounting, Assessment
Centre, and Field Review.
Group Appraisal method:-

In this method, an employee is appraised by a group of appraisers. This group consists

of the immediate superior of the employee, other supervisors who have close contact
with employee’s work, manager or head of the dept and consultants. This group uses
one or multiple techniques of evaluation.
This method eliminates ‘personal biases to a large extent, as performers are evaluated
on multiple methods. But it is very time consuming process.
Human Resource Accounting:-
This is a sophisticated way to measure effectiveness. It is a process of accounting for

people as an organizational resource.
The HRA process shows the investment the organization makes in its people and how
value of these people changes over time. The value of employees is increased by
investments made by the company to improve the quality of its human resources such
as training, development, and skills acquired by employee over a period of time
through experience, etc. In this method, employee performance is evaluated in terms
of cost and contributions of employees. Employee performance can be taken as
positive when contribution is more than the cost and performance can be viewed as
negative if cost is more than contribution.
360-DEGREE FEEDBACK system
360-degree feedback is the latest and, for some people ,the most exciting development in the
field of performance management. It hardly existed at all at the time of the 1991 survey but
11% of the organizations covered by the 1997 survey had some form of 360- degree feedback,
and the impression we gained was that many other organizations are contemplating using it.
A 360- degree feedback , system collects performance information from multiple parties,
including one’s subordinates peers, supervisor and customers. Corporations like GE Reliance,
Crompton Greaves, Wipro, Infosys, NTPC etc are all using this tool to discover home truths
about their managers.
USES OF 360-DEGREE FEEDBACK
The uses of 360 degree are numerous:
a)This medium of feedback is there to solely support learning and development as a whole

b)To support a number of HR resources such as appraisal, resourcing and succession-

planning, pay decisions
c) A long term perspective is adopted because the ultimate goal is personal growth.
d) Strength’s and weakness’s which are pointed out are regarded as developmental
opportunities.
360 – Degree Feedback
Manager
Peers Individual Customer
FEED BACK DEFINED
The workplace feedback implies two things;

(a)Job performance whether employee is capably performing specific tasks that have been
assigned
(b) Work-related behavior-the way performs his tasks,whether employee speaks politely to
customers and works cooperatively with other team members. The appraiser and the
appraise need to follow certain things while giving and receiving feedback. They are:
1.Adequate preparation: The appraisal process should be a continuous one. Informal sessions
could be every now and then to put the employee on track. Formal meetings could take place
on a fortnightly,monthly or basis depending on the progress shown by the employee from
time to time.
2.Describe Behaviour: The rater should give detailed feedback to the employee. This involves
questions such as
 What happened?
 Where and when did it occur?
 Who was involved?
 How did it affect others?
The question must give answer to the questions just mentioned above.
3. Proper timing: Feedbacks should be well timed. It should be given immediately after the
event has taken place.
4.Help both parties: To be effective, feedback should satisfy the needs of the rater as well as
the ratee. The rater may want to help, to influence, to establish a better relationship. A
negative comment of the rater like wise, should not influence the ratee’s behavior too badly.
He should not be afraid to ask question.
To this end, he must:
OTHER ASPECTS OF PERFORMANCE MANAGEMENT:
JOB EVALUATION
JOB ANALYSIS
Job Evaluation is different from performance appraisal. Performance appraisal refers to how
well someone is doing an assigned job. Job Evaluation on the other hand , determines how

much a job is worth to the organization and therefore what range of pay should be assigned
to the job.
JOB EVALUATION:
• The process of determining how much a job should be paid, balancing two goals
– Internal Equity: Paying different jobs differently, based on what the job entails
– External Competitiveness: Paying satisfactory performers what the market is

paying
BENEFITS:
It tries to link pay with the requirements of the job
It offers systematic procedure for determining the relative worth of jobs
An unbiased job evaluation tends to eliminate salary inequities by placing jobs having
similar requirements in the same salary range.
Job evaluation when conducted properly and with care, helps in the evaluation of the
performance of the existing employees as well as new jobs.
Performance Appraisal Practices in India (Few illustrations)
LARSEN & TOUBRO: Engineering major Larsen & Toubro has developed a
competency matrix which lists 73 competencies-that vary across managerial levels-to
measure performance and gauge development needs of its employees. The company
appraises individual employees in the listed competencies, and zeroes in on the
functional, managerial, and behavioral skill gaps. Subsequently, customer re-
inforcement is provided.
DAEWOO MOTORS:
Auto major Daewoo Motors Ltd has introduced a parameter on team work on
its appraisal process. Targets are set according to the business plans in the
beginning of the year and assigned to various functional teams. Subsequently
the team’s performance is measured on the basis of achievement vis-à-vis its

goals. This done, the top management allocates ratings to each team. In the
parallel process, the team supervisor appraises each team member. Both
ratings are taken into account before the final rating is assigned by the senior
management team to each functional team and every team member. Rewards,
including performance increments, bonuses, and promotions are given out on
the basis of this final rating.
PEPSI CO. INDIA:

Beverage giant Pepsi co. India employs an annual appraisal process that is
target driven. As a large part of Pepsi’s compensation package comprises
performance pay in the form of bonuses-varying from 15% at junior levels to
60% to senior rungs- the manager’s performance is determined on three key
parameters-volume growth, market share, and net operating profit, to
compute the variable component to compensation. Mangers are also rated on
key behavioral and functional competencies to assess their potential for
advancement within the organization.
Illustrations/Examples:
Cases 1:-
COMPANY PROFILE(ABOUT THE COMPANY)

Minda Corporation Limited is the flagship company of Ashok Minda Group. MCL has a turnover of
Rs.630 crores & about 3500 peoples are working with Minda Corporation limited India –wide &
overseas .Minda group is a major supplier of various spare parts of four wheelers as well as two
wheelers in India and overseas. MCL is situated at Chakan (Pune). There are near about 165 people
working with MCL in Chakan (35 staff members & 130 line workers). Minda Corporation has its
different branches at Aurangabad, Noida and Panthnagar. Total Quality is the cornerstone of every
activity at Minda. It is implemented by every stakeholder of the company - from the suppliers to every
member of the company. The basic information about the company is as follows:
Company Name: Minda Corporation Ltd.

Business Type: Manufacturer
Mechanical Security Systems, Electronic Security System, Window

Product/Service:
Regulators, Plastic Components ,Die Casted Components
Brands: Minda
Number of Employees: 501 - 1000 People
Eastern Europe
Main Markets: Southeast Asia
Mid East
Main Customers: Yamaha, Honda, Suzuki, Piaggio, Triumph
Total Annual Sales Volume: US$50 Million - US$100 Million
Export Percentage: 21% - 30%
Total Annual Purchase Volume: US$10 Million - US$50 Million
VISION:
 To be a world class company, known for very high customer base.
 To be internationally renowned organization, much sought after by both customer and

suppliers.
 To be a company known for nurturing and developing human resources for

organizational excellence.
MISSION:
 To design and manufacture vehicle security and access systems to world class
standards with state of the art technology and to market them at right price and time
and of right quality to customer’s full satisfaction.
 To maximize value to shareholders and provide value enhancement to customers,

employees and company served.
Introduction of the Project:

Competency represents the knowledge, skills, capacities and behavior which an

employee exhibit in doing his/her job and which are key factors in achieving
results pertinent to the organization’s strategy. The project titled “Performance
Management in MINDA corporation” is the process of identification of the
performance(Acquired and required) required to perform successfully a given
job or role or a set of tasks at a given point of time. It identifies an individual’s
strengths; weaknesses in order to help them better understand their roles and
responsibilities and then by making an action plan to minimize the gaps found
out in their performance. This is a new concept which when implemented
provide benefits to the organizations as well as the individuals or employees
working with it. Performance based HR system in an organization is necessary to
train, defines, retain talent and ensure optimum utilization of performance from
employees. It also helps to determine the roles, positions, compensation,
appraisals etc for the existing as well as the new employees on the basis of
actual performance levels through the process of measuring actual
competencies exhibited by individuals while performing their jobs.
KNOWLEDGE
Relates to information
Cognitive Domain
Set of ATTRIBUTE
SKILLS Relates to
qualitative
Relates to the aspects
ability to do,
personal
Physical Characteristics
domain Performance or traits
mgmt.
Outstanding
Performance of tasks
or activities

SCOPE OF THE PROJECT:
The scope of this project will be in adding value to the existing HR system and to
gain excellence in managing the changes by:
1) Identifying the training need for the employees.

2) Making career development plan for the employees.
3) Using the process for recruitment, i.e., Performance based recruitment.
4) Using the process for succession planning.
BENEFITS OF THE PROJECT:
Today individual employees as well as the organization have an ongoing need to

use and map their competencies.
Benefits of this project to individual employees are:
Once the individual knows his/her competencies and compare those to

that are asked for the job, they themselves can take initiative to
develop or train them to fit for the job they are assigned.
It will also help them to demonstrate their self-confidence that comes from knowing one’s
competitive advantage.
It will also help them to improve their performance by improving their soft (Behavioral skills
like observation, self-development, communication, etc) skills and hard skills (Technical skills
like writing computer programs, managing the balance sheet, etc).
The project will provide motivation to the individual employees to work hard and become
better and better by learning the missing skills required.
Benefits to the organization:
It will help the organization in linking people, strategy and performance.

To add value in the existing HR system.
It will welcome the changes required which is a vital culture today.
Attain a clear understanding of every member’s job profile.
Putting the right person at the right job.
To align organization’s vision, mission and business goals.
Establish expectations for performance excellence, resulting in a systematic approach to
professional development, improved job satisfaction, and better employee retention.

To redefine the roles and responsibilities of every individual so as to:
 Reduce the cost of manpower.
 Cost of incompetence.
 Proper employee engagement.
 Ensure optimum level of performance.
 To ensure quality management system requirement.
 To fill/minimize the gaps between the required & acquired proficiency.
Benefits to Managers are:
Identify performance criteria to improve the accuracy and ease of the hiring
and selection process.
Provide more objective performance standards.
Clarify standards of excellence for easier communication of performance
expectations to direct reports.
Provide a clear foundation for dialogue to occur between the manager and
employee about performance, development, and career-related issues.
DEFINITIONS:
COMPETENCY: Competency is an Underlying Characteristic of an individual that is causally related to

Criterion-referenced effective and/or superior performance in a job or situation.
Underlying Casually Criterion

Characteristics
Related Referenced

This means that the This means that a

This means that
competency is a fairly competency causes
competency actually
deep & enduring part or predicts behavior
predicts who does
of a person’s & performance
something well or
personality & can
poorly, as measured
predict behavior in a
wide variety of
situations & job tasks.
on a specific
criterion or standard.
COMPETENCY MANAGEMENT: Today the organizations must ensure that personnel performing
various duties have appropriate education, training & experience to perform those duties. Ensuring
them to have proper skills & competencies to consistently perform the task required of them is
sometimes a daunting challenge. World class organizations use competencies to articulate & leverage
exceptional organizational performance. Competency-based management system adds value and
enables the realization of business strategy and provides a distinctive, enduring advantage for the
organization.
PREFORMANCE MANAGEMENT SYSTEM: Performance management system (PMS) is the heart of any
“people management " process in organization. Organizations exist to perform. If people do not
perform organizations don't survive. It reflects how well an employee is fulfilling the job
requirements. Performance management refers to the entire process of appraising performances,
giving feedback to the employees and offering rewards or reprimand to them.
SUCCESSION PLANNING: Succession planning an important process which involves identification of

individuals or employees as the possible successors to the key or very senior positions in an
organization when such position become vacant. In short, Succession planning focuses on the
identification of vacancies and locating probable successor .Succession planning is usually for 2 to 5
years or 2 to 7 years period for an individual, but it is a continuous process for an organization.

TRAINING & DEVELOPMENT: Training is an integral part of HRD. It focuses on identifying & helping to
develop the key competencies which enable the employees to perform the current as well as the
future jobs & functions. Training can take place either On-The-Job Training such as job rotation or Off-
The-Job Training such as outside & in-class room training programmes.
REWARD MANAGEMENT: People join organizations expecting rewards. Competency management

helps in deciding whether to reward a person or not depending upon his/her skills/knowledge and the
way they are using it in their assigned jobs or roles.
When rewards are linked to competencies, what emerges is “The Skill Based Pay”. In the skill-based
pay, employees are paid on the basis of number of jobs they are capable of doing, or on the depth of
their knowledge. The purpose is to motivate employees to acquire additional skills so that they
become more useful to the organization.
PERFORMANCE MANAGEMENT: Performance management refers to the entire process of appraising

performances, giving feedback to the employees and offering rewards or reprimand to them.
COMPETENCY BASED PERFORMANCE MANAGEMENT SYSTEM: A competency based PMS helps to

identify core positions within the organization, identify soft skills & competencies for the position and
then provide training & development in the necessary competencies so as to achieve superior
performance in any job and also can better meet the competitive challenges of today’s market.
COMPETENCY BASED PERFORMANCE MANAGEMENT SYSTEM: A competency based PMS helps to

identify core positions within the organization, identify soft skills & competencies for the position and
then provide training & development in the necessary competencies so as to achieve superior
performance in any job and also can better meet the competitive challenges of today’s market.
REQUIRED COMPETENCY: Required competency may be defined as “The competencies an employee

must have in order to perform his/her job effectively”.
ACQUIRED COMPETENCY: Acquired competency is defined as the competency a person actually

possesses.
IN BASKET EXERCISES: An in-basket exercise assesses a candidate's ability to perform a

manager’s job from an administrative perspective. In the exercise, the candidate is confronted with
issues and problems that have accumulated in the manager’s “in-basket” after returning to work from
an extended absence. A sample of in-basket items might include memos, correspondence, e-mails,
directives, requests, reports, forms, messages, minutes, hand-written notes, etc., from management,
supervisors, staff members, inmates, and other stakeholders. The candidate's task is to review the in-
basket items and then take action on these varied issues and problems using action forms to record
notes, comments, and responses. These actions are then assessed and rated based on job related
competencies through a formal question and answer session by a group of trained raters.
Standardized criteria and predefined rating scales are used to assess the candidate.

EXPERT PANELS: In this method of analyzing the competencies, a panel of experts is asked to
brainstorm personal characteristics employees need to perform the job at an adequate (minimum
acceptable level) and a superior level. These experts can be supervisors for the positions being
studied, superstar performers in the job, or outside experts, perhaps HR professionals who know the
job well.
SURVEYS: This method facilitates quick and cheap collection of sufficient data for statistical analysis.
Large number of jobs can be studied efficiently & at different times to identify trends in competency
requirement. But data are limited to items and concepts included in the survey & therefore miss
competencies not included by those who conducted the surveys.
DIRECT OBSERVATION: In this employees are directly observed performing job tasks
and their behavior are coded for competencies. But again it will take a lot of time to have a
chance of seeing something important.
360 DEGREES FEEDBACK: 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. But the reason we did not use 360 feedback is
that it is not a way to measure employee performance objectives, not a way to determine whether
an employee is meeting basic job requirements.360 feedback is not focused on basic technical or job-
specific skills.
ROLE PLAY EXERCISE: This is a technique in which some problem- real or imaginary-involving human
interaction is presented and then spontaneously acted out. Role play develops interpersonal skills
among participants. Immediate feedback helps them correct mistakes. But it is not easy to duplicate
the pressures and realities of actual decision making on the job; and individuals, often react
differently in real-life situations than they do in acting out a simulated exercise. And hence the result
will not be accurate.
GROUP DISCUSSION: In this candidates are asked to discuss among themselves hypothetical
problems and arrive at a recommended solution. It reflects various competencies like team player,
analytical thinking, communication, etc. It is time consuming and needs experts for analysis.
RESEARCH METHODOLOGY:
Research in common parlance refers to a search for knowledge. We can also define research as a
scientific and systematic search for pertinent information on a specific topic.
And research methodology is a way to solve the research problem. It may be understood as a science
of studying how research is done scientifically. To carry out any research there are various steps which
need to be followed. We call it as research design. A research design is an arrangement of conditions

for collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure.
TRAINING NEEDS IDENTIFICATION:
As we can see from the analysis that there are competency gaps in the employees’ performance, it
means that the skills which are required to perform the job are missing, not completely but there are
some gaps and the objective of this project is to minimize those gaps so as to maximize the
employees’ efficiency in performing the job. There are various ways to minimize these gaps. The most
important way is by imparting training to the employees.
Training program improves employees’ ability to adapt to changes in the marketplace. Because the
staff is learning and working efficiently we can shift to new ideas more quickly. Training also ensures
you have quality people on hand when you expand. Because employees know what to do, they can
grow our business.
Besides that, training builds a motivated and committed team that’s loyal to the company. It also
creates a pool of qualified replacements for employees who leave. Ongoing training helps us fill voids
with good people.
DEVELOPMENT PLAN:
Programmed Instruction: Here training is offered without the intervention of a trainer,
Simulation: A simulator is any kind of equipment or technique that duplicates as
nearly as possible the actual conditions encountered on the job. It is an attempt to
create a realistic decision making environment for the training.
Games: There are so many games that can be arranged. Some of them are:
LEADERSHIP GAMES: Exercise to teach different styles of leadership,
SKILL GAMES: Tests to develop analytical skills,
COMMUNICATION GAMES: Exercise to build bias-free listening and talking, TEAM

BUILDING GAMES: Exercises requiring collaborative efforts.
Shadowing: Working under a senior to watch and learn.

Icebreaker: Games to get team members know each other.
Cross cultural training: Programmes to teach specifics of varied cultures.
Career Development Initiatives: Career planning workshops can be arranged, during
workshop, employees are made to define and match their specific career objectives
e\with the needs of the company.
Career counseling: It helps employees discuss their career goals in one-to-one counseling
sessions.
Mentoring: It involves coaching, advising, & encouraging employees of usually lesser

ranks.

PERSONAL DEVELOPMENT PLAN: In this, employees write their own personal

development plans. Such development plan includes development needs and action plans
to achieve them.
THE MAIN MOTTO OF MINDA CORPORATION:
 Direct Responsibility & Accountability vs. Role Clarity

 Wider Span of Control
 Better, Fast and Clear Communication
 Quick Decision-making
 Team Work & Synergy
Case 2
Seimens Case
Siemens is an organization, which as part of its global corporate philosophy believes in
empowering employees, and which calls for competent and motivated employees to
achieve world-class performance.
The goal is to develop employees who will run the company as entrepreneurs, who take
calculated risks and consequently, full responsibility for their actions. In a similar vein,
the manager will have to take on the mantle of the coach to the employee. The HR
Organization will have to take on the role of consulting partners who advice employees
on all aspects of individual/personnel development.
To this respect, two initiative is being rolled out across the Siemens Group companies in
India
1) Edge ( employee dialogue for growth and entrepreneurship): The New Employee
Dialogue process has been designed as a tool, which looks at the overall growth
and development of the employee from a holistic and long-term perspective.
2) Four Point Program :
1) Edge:
Edge is a New Employee Dialogue process has been designed as a tool, which looks at
the overall growth and development of the employee from a holistic and long-term
perspective.
In this Process a Division/Business Unit Personnel Day, which will be held in August
every year. On this day, the Heads of Divisions/Business Units/Corporate Departments

and Commercials will meet with their Direct Reports(superiors) to review officers’
performance, potential and ultimately close in on the recommendations for promotions,
increments, career and overall development actions.
Also a Company Personnel Day will happen around September where the Corporate
Management will meet with the Division/Business Unit Heads and Corporate
Department/Commercial Heads to discuss and decide on important company related
proposals as well as look into the names of the high potential employees.
At the Country level too, the respective Managements of the Siemens Group companies
will meet to discuss possible potentials for future key functions.
Objective:
1. Ensures that decision-making takes place on a common platform, which will

ensure greater transparency and acceptability of the entire process.
2. Process has been made comprehensive and avoids multiplicity of HR processes,
yet retaining clarity at the same time
3. Creating better Communication, Transparency, Clarity and Trust between the
manager and employee.
4. For sustaining competitive edge, both for the company and the employee.
2) Four Point Program:
Under this method, uses Business Scorecard/Balance scorecard as a method of

evaluation. The four perspectives of the scorecard, namely Financial, Customer, Process
and Employee.
Objective: The financial, customer and process objectives on the balance scorecard typically will
reveal large gaps between the existing capabilities of the people and what will be required to achieve
breakthrough performance. Thus to close these gaps the organization will have to invest in
performance appraisals and re-skilling employees.
 Financial scorecard:-
The Balance Scorecard retains the financial perspective as it indicates whether the company's
strategy, implementation and execution are contributing to bottom-line improvement i..e evaluation
of both the financial process and the bottom-line employees. Some features covered under here are:
 Sales Growth
 Operating income- New product
 Return on Capital Employed
 Return on Investment

 Percent of revenue from new products/services

 Profitability from products/services/customers
 Revenue per employee.
 Unit cost of performing work or producing output.
 Customer scorecard/ Perspective:-
This perspective contains core outcome measures of such things as
customer satisfaction, customer retention, and new customer acquisition, in addition to

more specific measures such as:
 Market share with target customers

 Percent growth of business with existing customers
 Customer profitability
 Lead time for product development
This perspective also includes measures of things customers truly care about, such as
 On-time delivery
 Response time
 Defect rates
 Returns by customers
 Warranty claims
 Success in handling field-service requests.
Value proposition is the key concept for understanding the drivers of the core
measurements of satisfaction. Some of the drivers could be
 Product/Service Attribute
 Customer Relationship
 Image & Reputation.

 Process Perspective:-
Under this perspective, employees are evaluated based on how entirely new products
and services are created that will meet the emerging needs of the current and future
customers.
This perspective may include measures such as
 Percent of sales from new products

 The rate of new product introduction versus plan
 Elapsed time to develop next generation of products
 Break-even time for new products
Besides the above there are traditional manufacturing measures, such as labour
efficiency, quality, waste, scrap, rework and cycle time.

 Employee perspective:-
The fourth perspective of the business scorecard, the Employee perspective identifies the capabilities
that the organization must build to create long-term growth and improvement.
Some typical measures for the Employee Perspective are
 Introduction of New incentive Schemes

 Introduction of Recognition Schemes in the division (for non-monetary rewards)
 Re-skilling of Employees
 Training Employees for critical competencies/on critical technologies
 Retraining cycle time
 Percentage of key staff turnover
 Percentage of Implementation of Career Development Plans of reportees
 Enunciation & implementation of communication policy for dissemination of Strategic
information
 Establishment of Knowledge sharing platforms
 Revenue per employee
 Time ratios
 Value added per employee
The Motto followed in Seimens - If the employees win, the company wins; and if the
company wins, the employees must also win.
Case 3:
Asian Development Bank
Company Profile:
The Asian Development Bank (ADB) is a regional development bank established in 1966 to
promote economic and social development in Asian and Pacific countries through loans
and technical assistance. It is a multilateral development financial institution owned by 67
members (as of 2 February 2007), 48 from the region and 19 from other parts of the globe.
ADB's vision is a region free of poverty. Its mission is to help its developing member
countries reduce poverty and improve the quality of life of their citizens.

The work of the Asian Development Bank (ADB) is aimed at improving the welfare of the
people in Asia and the Pacific, particularly the 1.9 billion who live on less than $2 a day.
Despite many success stories, Asia and the Pacific remains home to two thirds of the
world's poor.
The bank was conceived with the vision of creating a financial institution that would be
"Asian in character" to foster growth and cooperation in a region that back then was one
of the world's poorest. ADB raises funds through bond issues on the world's capital
markets, while also utilizing its members' contributions and earnings from lending. These
sources account for almost three quarters of its lending operations.
Organization:
The highest policy-making body of the bank is the Board of Governors composed of one
representative from each member state. The Board of Governors, in turn, elect among
themselves the 12 members of the Board of Directors and their deputy. Eight of the 12
members come from regional (Asia-Pacific) members while the others come from non-
regional members.
The Board of Governors also elect the bank's President who is the chairperson of the
Board of Directors and manages ADB. The president has a term of office lasting five years,
and may be reelected. Traditionally, and because Japan is one of the largest shareholders
of the bank, the President has always been Japanese. The current President is Haruhiko
Kuroda.
The headquarters of the bank is at 6 ADB Avenue, Mandaluyong City, Metro Manila,
Philippines, and it has representative offices around the world. The bank employs
approximately 2,400 people, coming from 55 of its 67 member countries, and with more
than half of the staff being Filipino.
Asian Development Bank
Fighting poverty in Asia and the

Motto
Pacific
Formation December 19, 1966
Type Regional organization
ADB’s Project Performance Management System:
The Project Framework & Performance Indicators:

Indicators are Motivators
For
 P- Personal Growth and Development

 I- Identifying the need for Decision
 A- Accountability
Personal Development:
 Height, weight
 School Grades
 Cleanliness
 Obedince
 Confirmity with peer group
 Sporting abilities
Work-Private sectors Indicators:
 Production
 Sales
 Sales growth
 Profits
 Share Prices
 Sales/employee
Work-Public Sector Indicators:
 Previously focused upon inputs, spending compared to budgets and activity levels.
 Shifting grudgingly towards outputs and outcome indicators at all levels of
government.
Positive motivators in the public sector:
 Ministers and Senior Executives.

 Managers and Employees of Govt.owned enterprises(GOEs)
 Civil Servants.

Types of Project Decision:
 Should we invest in this project ?
 Is it on track?

 Is it going in the right direction?

 Have we succeeded?
 Did our corrective action work ?
 What should be our standards?
Indicators in Project Framework:
Design Indicators Monitoring Assumption

Summar & targets Mechanis /Risk
y m
Goal
Purpose
Outputs
Activities
Inputs
ADB’s Project Performance Fewer accidents Management Systems:
Note: Measures should be different for each level.
Different levels—Different Indicators:
Long Term goals Economic Growth
Immediate ObjectivePurpose Lower transport cost
Outputs New roads (KM Existing Roads Tax Services

Constructed) Upgraded Improved

Current State of indicators:
 ADB, and most DMC EA’s, tend to focus on input performance measures—specially $
disbursement.
 Implementing agencies usually tarck output measures—such as agricultural

production, and
 Central agencies usually tracks economic indicators .
 However, CAs EAs and IAs do not routinely and systematically collect and collate
indicators to assess the effects and impacts that flow from their projects, unless
specifically required to do so
 Therefore ADB must make provisions to measure and collect such data for the
programs and projects it funds.
Typical problems:
 Design issues— poor quality project frameworks, inconsistencies in project

documentation
 Monitoring issues – inadequate indicators and data (Baseline & MIS)
 Lessons learned – lack of participation; many foreseeable design faults; low

understanding of development objectives(goals and purposes); assumptions and
risks; optimism at project design stage is not sustainable.
Case 4:
BHEL case
As a continuing process of linking HRM to market forces and stakeholders –driven

policies,several new HR initiatives were put in pace during the year. Having introduced
performance management system(PMS) as a replacement of conventional Annual
Confidentiality reports (ACRs).the company became the first PSE to implement during
the year ,an e-enabled performance management system for executives called e-MAP,
moving ahead through performance.The new performance management was started
by the initiatives and high involvement of the top management with a drive to excel
and to counter competition with domestic as well as foreign suppliers of equipment.
But-

 The process of e-MAP took off in 2002.

 The exsisting performance management system was analyzed and improvement
measures were arrived at from the analysis.
 The precondition fro making it user friendly and time saving s e-enablement.
 Simultaneously, a pilot project to develop implementation tools and processes for the
new performance management system was undertaken.
 A combination of e-enablement and new tools and processes formed the basis to
implement MAP.
 The 2002-03 cycle process review and the report were done.
 They also are assisting in performance planning for 2003-2004.
THE PERFORMANCE PLANNING FOR 2003-2004:
 BHEL leadership team workshops were held.

 500 agents were selected to implement the process throughout the organization.
 The communication principle-five variables were there-
1)events
2)audiences
3)messages
4)media
5)messenger
 It was decided,how to discuss the pms at different levels…following agenda in view:

1. The PMS feedback last year
2. Expectation from system
3. Key concerns
 BHEL has been continuously improving upon the process/approaches for managing
performance.
 The PMS was developed through in-house efforts,taking inputs from all concerned
groups.however in order to address certain issues,which mainly related to:
1. Alignment
2. Consistency
3. Transparency and
4. Ownership
 The basic parameters parameters have been bifurcated in two ways---
1)performance
i)KRAs
ii)routine responsibilities

2)capability development
i)competence
ii)development plans
PERFORMANCE
1)KRAs :
 The KRAs to recognize the efforts that creat value for the organization.
2)ROUTINE RESPONSIBILITIES:
 Appraisee to propose weightage to each appraiser to approve
 Coud be either outputs or activities depending upon roles
CAPABILITITES DEVELOPMENT:
1) COMPETENCIES:
 Each competency to have 3-5 distinct proficiency

 Each unique role will have pre defined competencies and
proficiency levels; and
 2-3 competencies would be selected by the appraiser as the
development competencies for the year.
2)DEVELOPMENT PLANS:
 Based on the last year performance, competency gap and

future growth development plan for each individual will be
prepared and incorporated in the plan by the appraise and
approved by the appraiser.
PERFORMANCE PLANNING FEATURES:
 MODIFICATION TO THE PERFORMANCE PLAN:THE CHANGE CAN

BE INCORPORATED UNDER EXTRANEOUS CIRCUMSTANCES.
 ROLE CHANGE: In the event of a transfer a time weighted
average performance rating of the roles performed by the
appraisee will be taken as his performance score of the year.

TARGET SETTING PRINCIPLES STRETC/ LOADING :
 Stretch principles :Clearly articulated six target settings

principles for BHEL.
 Appraiser and appraise establish KRAs and targets based on
these target setting principles.
PERFORMANCE FEEDBACK AND REVIEW:
 PERFORMANCE VS EFFORT: Overall rating will be based on

achievement of the performance parameters only.The PMS
would ensure balanced KRAs,capturing capability and process
building effort.
 FREQUENCY OF FEEDBACK: Continuous performance feedback
made possible through appraise e-PMS dairy.
COMPETENCIES FOR MAP:
 Planning and organizing

 Initiative and drive
 Commitment to quality
 Creativity and innovation
 Interpersonal relationship
 Risk taking
 Decision making
 Subordinate development
 Job knowledge
 Knowledge
 Knowledge of business environment
 Job knowledge
 Knowledge of business environment
THE PERFORMANCE CYCLE:
 STARTS WITH :Unit / business sectors Draft – Budgets

 Offline performance planning

 Mid year review

 Final review and feedback
 Normalization of scores
Case 5:
NOVO NORDISK INDIA PVT. LTD.
PERFORMANCE APPRAISL:
ANNUAL APPRAISAL
TOOL: KTI-key performance indicator
Based on:
Meeting targets on time
Postings done on time
Team player
interpersonal skills
general behavior and attitude of the employee
ratings are:
out standing performance, exceded expectation, partially met expectation, did not meet
expectation.
Ratings done fpr work:
Green- fully met target, yellow- partiallt met target, red- did not meet target.
Bad performance:
Same salary and no promotion
Good performance:
Bonus depending on the quality of work, increment in salary, and some times promotion.

Conclusion
What makes some businesses more successful than others? What is today’s key competitive
advantage? The answer is people. Organisation with motivated and talented employees
offering outstanding service to customers are likely to pull ahead of the competition, even if
the products offered are similar to those offered by the competitors. Customers want to get
the right answer at the right time and they want to receive their products or services
promptly and accurately. Only people can make these things happen. Only people can
produce a sustainable competitive advantage. And, performance management systems are
the key tools to transform people’s talent and motivation into a strategic business advantage.
Performance management is continuous process of identifying ,measuring and developing

the performance of individuals and team and aligning performance with the strategic goals of
the organization. Performance management is critical to small and large organisation, for
profit and not for profit, domestic and global, and to all industries.
Unfortunately, howewer, if they have a performance management , few organization use

their existing performance management system in productive ways. Performance
management is usually vilified as an “HR Department requirement”.
In this case analysis we tried to discuss the advantage of implementing a successful

performance appraisal system as well as the negative outcomes associated with deficient
system.It also includes a description of employee developmental plans’& the advantages of
using 360-degree appraisal system.
References :
Book of Human resource management by V S P Rao.
Performance management by Michael Armstrong & Angela Baron.
Performance management & Apprisal Systems by T.V.Rao.
Performance measurement and management by G.K.Suri, C.S
Venkataratnam,
N.K.Gupta.
Seimens case: Vikas choudhary, Senior Excutive.

ADB: http//: www.adb.org
Minda: P S das, HR Minda Corp, Pune.
wekipedia

Nova Nordisk India Pvt ltd: SAMUEL RAJ
Bhel : Performance management by Michael Armstrong & Angela Baron

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[HUMAN RESOURCE DEVELOPMENT] August 21, 2009

Names: Roll No.

Institute Of Finance And international Management Page 1

Institute Of Finance And international Management Page 2

Several individuals were extremely instrumental in allowing us to

Institute Of Finance And international Management Page 3

DEFINITION, FOUNDATION AND SCOPE

What is Performance Management?

 Armstrong and Baron define performance management as a “strategic and integrated

 Performance management is that part of an organization’s people-related function,

FOUNDATION OF PERFORMANCE MANAGEMENT:

Why organizations introduce performance management?

ORGANISATION REASONS GIVEN

American Express Services Europe Cultural change

Edinburgh International Conference Centre Quality-providing the

customer with what the

Institute Of Finance And international Management Page 4

British Medical Association Customer Service

Natural History Museum Link pay to performance

Jamount UK Improve performance and

Identify training needs.

London Borough of Bromley Feedback from staff

 Corporate strategy and objectives

THE PERFORMANCE - MANAGEMENT CYCLE

Institute Of Finance And international Management Page 5

Performance Managed Organizations are likely to have the following

 Measurable performance targets

 Pre-eminence of intrinsic needs of managers without neglecting their extrinsic

 Ownership of performance management by line management rather than the

Key to Performance Management:

Building organizational capability and successful implementation of

 High - commitment management practices is a key managerial responsibility

 High-performance management practices require consistent leadership attention,

A full cycle of performance management consists of Planning, Monitoring, Developing,

Institute Of Finance And international Management Page 6

Performance is degree of accomplishment of the tasks or how well an individual is fulfilling

Managing this whole process of evaluation is called Performance Management, which is

Performance Management and People Management:

 Performance management is that part of an organization’s people-related function, which

 Concern the performance of its people

 And optimize individual and collective output

 Effort at the organizational level, which determines the organization’s internal

Organizations need performance standards, at the level of individual managers as well as at

 Organizations want to standardize precise expectations

 Managers need equitable and consistent standards for their individual

Institute Of Finance And international Management Page 7

 Managers expect that managers everywhere in the organization will use

Steps to be followed while Introducing a Good Potential Appraisal

Quality needed to perform for each job:

Based on job descriptions, the roles to be played people must be prepared.

1 Rating by others: The potential of a candidate could be rated by the immediate

i. How much weightage to accord to merit in place of seniority in promotions?

Institute Of Finance And international Management Page 8

ii. How much weightage to accord to each of the performance dimensions-

Employee evaluation Concept:

Formal performance evaluation is a system set up by the enterprise to regularly and

- To design a system for appraising performance, it is important to first define what is

Performance Appraisal: Definition

When Performance appraisal is implemented correctly, it can affect corporate performance

It mainly involves three steps:

Institute Of Finance And international Management Page 9

a) Setting work standards

Benefits of performance appraisal: