Master of Business Administration - MBA Semester 4 MB0016 Performance Management and Appraisal - 4 Credits (Book ID: B1337) Assignment

(60 Marks)

Q1. What are the aims of Performance Management? Ans: One of the important objectives of performance management is identifying the strength and weaknesses of employees and finding ways to overcome their shortcomings. This is done by evaluating employee output and the companys overall ability to meet the goals by having quarterly or annual audits. Often, after an evaluation, there will be widespread company meetings where managers and employees discuss concerns and solutions to problems. Another objective is to discover where employees and the company are falling short. This is done by going through details such as profits earned, new clients acquired and the contribution of employees to make these things happen. Employees whose contribution are minimal or not up to the mark are counseled on how to improve performance. The evaluation of an employees performance is based on their work output and the amount of time spent by them on the project. Although time spent in an office is not an accurate way of measuring performance, most companies still have the notion that better employees put in longer hours of work. A better way of measuring employee productivity would be to measure the output of work and the accuracy of work completed. Overall evaluation of a company and its ability to set and reach goals is another important objective of performance management. Increasing revenue is the overall goal of any company. Other goals may be to acquire more or specific clients, develop new products of hire new talent. It is very easy to determine which of these goals have been met, because these are things that can be seen or calculated. The inability of a company to meet the goals is mainly due to poor leadership, poor planning, poor implementation or poor employee performance. Economic factors also play a major role, but are better for companies to concentrate on factors that are within their control. The best way of improving a companys overall output is motivating the employees and improving their performance. To identify and remedy situations that hinder company performance is another important objective of performance management. This includes replacing underperforming employees, gaining new clients, developing new strategies for reaching the goals and discussing strategies that have worked in the past.

In order to meet the objectives of performance management and improve the overall performance of a company, every employee must work with the team members to develop new techniques and implement changes.

Q2. Define Motivation? Explain Mc Greg ors theory X and theory Y? Ans: Definition Motivation: Goals are then established which will satisfy these needs and wants and a behavior trail is selected, which is expected to facilitate the achievement of the goal. If the goal is achieved, the need will be satisfied and the behavior is likely to be repeated the next time a similar need arises. If the goal is not achieved, the same action is less likely to be repeated. Motivation can be understood by understanding human nature. Human nature can be very simple, yet very complex too. An understanding and appreciation of this is a necessity to effectively motivate employees, which leads to effective management and leadership. Douglas Mc Gregorys theory X and theory Y. In the book The Human side of Enterprise, Douglas McGregor states that employees of an organization can be managed in two ways. The first is called category X which is called category X which is basically negative and the other is basically Positive which falls under the category y. After viewing the way in which the manager dealt with employees, McGregor concluded that a managers View of the nature of human beings is based on a certain grouping of assumptions. The Managers behavior towards subordinates is based on these assumptions: 1. Employees inherently do not like work and whenever possible, will attempt to avoid it. 2. Because employees dislike work, they have to be forced or threatened with punishment to achieve goals. 3. Most workers place a greater importance on security over all other factors and display little ambition. 4. In contrast, under the assumptions of theory Y: 5. Physical and mental effort at work is as natural as rest or play. 6. People do exercise self-control and self-direction if they are committed to those goals. 7. Average human beings are willing to take responsibility and exercise imagination, ingenuity and creativity in solving the problems of the organization. 8. Looking at the way the things are organized, the average human beings brain power is only partly used. Analyzing these assumptions, we can detect that theory X assumes that lower-Order needs dominate individuals and theory Y assumes that higher-order needs dominate

individuals. An organization that is run on the lines of Theory X tends to be authoritarian in nature that is such organizations believe that they have the power to enforce obedience and the right to command. In contrast, Theory Y organizations can be described as participative, where the aims of the organizations and of the individual in it are integrated; individuals can achieve their own goals best by directing their efforts towards the success of the organisation . Q.3 Explain Managers responsibility in performance Planning? Ans: There are six basic responsibilities of a manager. These responsibilities can be classified into two those that the manager has to work on with the employees before the performance planning meeting and those accomplished during the performance planning meeting. Before the meeting, the manager has to: 1. Re-examine the organisations mission statement, or vision and values, and teams goals. 2. Understand the employees job description. Think about the goals and objectives the person needs to achieve in the upcoming appraisal period. 3. Recognise the most important competencies that are expected from the employees in performing the job. 4. Determine what can be considered as fully successful performance in each area. During the meeting the manager has to: 1. Discuss and come to agreement with the employees on the most important competencies, key position responsibilities, and goals. 2. Discuss and come to agreement on the employees development plan. A major part of the job involved in effective performance planning happens before the actual meeting. Before the meeting begins, the manager and the employees should review the documents that provide a clear picture of the companys mission statement and the corporate vision and values statement. The organisations strategic goals for the upcoming year, the department or division goals the individual needs to accomplish over the year and the important competencies or behaviours the manager expects the employees to display in their performance. If there are no goals set for the department, the manager can set the goals before the planning meeting begins. After setting goals for the entire team or department, the manager can encourage each subordinate each subordinate to set individual goals that help ensure that the overall department goals will be met.

Apart from Job-competencies and results, the managers also have to discuss how performance will be measured. The manager needs to describe what level of performance will be considered to be fully successful. Before the meeting begins, the manager also needs to think about the subordinates development needs. It is the employees responsibility to create and execute a development plan. However, the manager needs to be prepared with suggestions on areas where development will have a payoff. Q.4 Describe the traditional method of performance Appraisal? Ans: The qualitative and quantitative aspects of job performance are measured by performance appraisal methods. An appraisal system evaluates the employees performance and also their potential for development. The main objectives of an appraisal are to evaluate previous performance, to identify the training needs, to set and prepare on future objective and goals, and to ease the accomplishment of these goals. The traditional methods of performance appraisal are: 1. 2. 3. 4. 5. 6. 7. Essay appraisal method. Straight ranking method. Paired comparison method. Critical Incidents method. Field review checklist method. Graphic ratings scale method. Forced distribution method.

Essay appraisal method: Since essay appraisals are unstructured and undefined to a great extent, lack of consistency is a major problem. The indefinite, unstructured nature of the essay appraisal makes it highly susceptible to evaluator may simply. This does not generally represent a clear picture of the employee or the job, which brings down the reliability of the method. Straight ranking method: Ranking methods compare employees with each other, resulting in an ordering of employees in relation to one another. Rather than in specific judgements about a number of job components, ranking regularly results in order a group of employees from best to worst overall. Paired Comparison method: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparison on the basis of the overall comparisons, the employees are given the final rankings.

Critical incidents method: This method describes how the employee behaved during the critical incidents with respect to performance over a period of time. These are then matched with the employee focusing rather than on qualities. Field review checklist method: Since every individual differs in quality and attitude, they unintentionally introduce bias in their ratings. To overcome this, essay and graphic rating measure can be combined in an organized in an organized review process. In the field review method, a representative of the HRM staff meets a chunk of evaluators from the supervisory units to discuss each. Graphic ratings scale method: One of the most methods of performance appraisal, the graphic ratings scale method requires an evaluator to measure on a scale, the angle to which an employee reflects a particular trait, behavior, or performance result. Evaluating forms comprise a number of scales, each relating to a certain job or performance-related measurement, such as job skills, responsibility or quality of work. Q.5 what are the causes of subjectivity and how does error in rating Occur? Ans: Subjectivity: As long the evaluation and comparison of individuals would be concerned a definite extent of subjectivity is likely to occur. Subjectivity or biases tend to occur when the grading allotted by any evaluator to any individual is derived more from aspects rather than the presentational or behavioral manner exhibited by individual on the aspects under evaluation. The following are generally recorded events that add to errors and biases in evaluation raising subjectivity: Sometimes evaluations accept or reject some particular acts or their appraise and thus lean to assign them compassionate grades (leniency effect). The other evaluators might adapt a reverse theory while inspecting their appraise and thus lean to rate them too harshly Some evaluators assign nearly equal grades to their appraise due to their conscious nature, that is, they lean to grade most of their appraises around the average. Understanding rating errors. As we just discussed in the previous paragraph about subjectivity and its effect, lets see what makes an evaluator to overlook such rating errors. There are several arguments against the weight-age of scores deduced from grades. People being graded may not be presenting in their natural behavior. The condition or assignment may not draw out normal attitude, or the graders may have accidentally disfigured the results. Some of the grading effects that have been recognized and considered are: . The halo effect. The parody that an evaluator rates an employee on on parameter can contradict his or her notion of that individual on other parameter. For example, in one of the two videos of the same employee the employee was acting in a friendly manner, while

in the other he was behaving in an arrogant manner. While watching the friendly tape the evaluators graded the employee more positively on appeared qualities, Stereotyping: The parody that an evaluator develops about a whole group can vary when compared with a single member of the group. For example a manager may discover boldness in a team leader, but then every team leader is required to be bold . Perception differences: The perspectives and previous incidents of an evaluator can influence his/her understanding of ones behavior. Leniency/stringency error. When an evaluator doesnt have sufficient data to deduce an objective grading, he/she may manage by allotting grades that are thoroughly higher or lower. Q.6 what are the methods to measure Performance? Ans: Measure Performance: Since essay appraisals are unstructured and undefined to a great extent, lack of consistency is a major problem. The indefinite, unstructured nature of the essay appraisal makes it highly susceptible to evaluator may simply. This does not generally represent a clear picture of the employee or the job, which brings down the reliability of the method. Straight ranking method: Ranking methods compare employees with each other, resulting in an ordering of employees in relation to one another. Rather than in specific judgements about a number of job components, ranking regularly results in order a group of employees from best to worst overall. Paired Comparison method: A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparison on the basis of the overall comparisons, the employees are given the final rankings. Critical incidents method: This method describes how the employee behaved during the critical incidents with respect to performance over a period of time. These are then matched with the employee focusing rather than on qualities. Field review checklist method: Since every individual differs in quality and attitude, they unintentionally introduce bias in their ratings. To overcome this, essay and graphic rating measure can be combined in an organized in an organized review process. In the field review method, a representative of the HRM staff meets a chunk of evaluators from the supervisory units to discuss each . Graphic ratings scale method: One of the most methods of performance appraisal, the graphic ratings scale method requires an evaluator to measure on a scale, the angle to which an employee reflects a particular trait, behavior, or performance result. Evaluating

forms comprise a number of scales, each relating to a certain job or performance-related measurement, such as job skills, responsibility or quality of work.