Name Ragistration No. Learning Center Learning Center Code Course Subject Semester Module no.

Date of submission Marks awarded 4

Vinni shastri 1205024960 Nimact Jodhpur 01856 M.B.A. Performance Management&Appraisal

MU0016

Q.1Discuss the principles and dimensions of Performance Management (A)Explaining the principles of Performance Management. (B) Explaining the dimensions of Performance Management.
Ans. Principles of Performance Management Integration of individual

and organisational objectives: The first principle is that the organisations and the
individual goals should be aligned and integrated. This is not to say that all that an individuals demands have to be met always; but that the individual objectives have to be aligned with the organisational objectives. An individual is hired to achieve some organisational goals and the individual too joins an organisation to achieve some of his goals. Therefore integration of the individual and organisational goals is a natural principle in PM. When an individual is persuaded to increase the goal or achieve stretch goals, this principle is in operation assuming that a higher goal brings benefit to the individual as much as to the organisation. This principle leads

to the concept of meeting individual development needs, identifying those employees with a good growth potential and furthering the goals, identifying poor performers and rectifying their performance, etc.

Specificity: PM should have specificity. PM goals therefore cannot be discussed in ephemeral

or vague terms. That can lead to confusion even though we accept that the business environment has a lot of uncertainties. More importantly, it has to be specific to the situation and the cycle of the PM rather than based on some old events or the actions of an employee in another PM cycle.

Measurability: PM without clear measurements agreed between the parties in question

often fail because it becomes susceptible to interpretation. Also it becomes difficult to compare it. Hence without fulfilling this principle, it becomes difficult to adhere to the first principle of integration mentioned above. Without adhering to this principle, PM would be misconstrued as a device that deals with difficult goals, however, in reality, it aims at identifying standards of performance and understanding where every employee of the organisation is located across the range of performance set by the organisation.

Mutual Agreement: PM stands on mutuality and therefore the goals, feedback and so on
must be based on mutual agreement than thrust upon the other party. This automatically caters for fulfilment of justice. Effective performance management needs managers who not only have an open and honest management style, but who also provide support and direction. It implies that the managers should have a thorough understanding of their institutional strategy and the big picture. It also implies recognising that appraisal is not about supervision, but is more concerned with helping individuals set strategic goals for themselves that are consistent with those of the organisation. Mutuality leads to commitment and therefore employee engagement.

Continuity: Performance management is not a fixed event; it is a cyclic process centred on

learning and development. Performance management does not just happen, as is often assumed, at an annual event set up for the purpose. Formal appraisal is but a single aspect of the process. Feedback on progress and achievement is an important aspect of the learning cycle since we all need high-quality regular feedback if we are to develop. Indeed, conventional wisdom tells us that any feedback, even if negative, is better than none at all. Managers, then, need to be not only particularly skilled in this regard, but they must also seek every opportunity to provide feedback to the team members.

Customisation: Performance management is a dynamic system. It is a natural process of

managing people. Performance management is the way an organisation views its employees.

This may not necessarily entail following best practices, but rather doing what is best for the organisation. Either way, the focus will, or should, invariably be on changing behaviour, not paperwork. It should focus on the process, rather than the system. Performance management works best and succeeds most when it is aligned with the culture, climate, aspirations and values of the organisation.

Flow: Principle of flow demands that PM is a process rather than a system. There has to be a
logical sequencing so that the event unfolds like a story. Thus setting targets may be the first necessary step, knowing the basis for the targets based on earlier data has to be defined, the targets set have to complement the resources and so on. These occur only if we respect the principle of flow.

(B) Dimensions of Performance Management Performance management

involves thinking through various aspects of performance, identifying the critical dimensions of performance, planning, reviewing, developing and enhancing performance and related competencies. Performance has many dimensions. In this section we will discuss the following dimensions of performance.

1.Output or result dimension 2. Input dimension 3.Time dimension 4.Focus dimension 5.Quality dimension 6Cost dimension.

Output dimension: Output dimension or result dimension is the most acceptable, visible
and measurable dimension of performance. It describes the consequence of inputs. It describes the standards to be achieved in an easily measurable form. For example, productivity, number of customers increased, financial targets, deadlines of projects, etc. In PM parlance, these may also be known as key result areas.

Input dimension: This dimension deals with the activities or tasks to be accomplished by the
individual. The nature of activities to be undertaken by the individual, the time frame, the

quality of inputs, etc., constitute the input dimension. It includes other resources required for the output, for example, new skills, money, training, etc. Performance can be managed better if the nature of inputs required can be conceived without mistakes, planned properly and implemented.

Time dimension: Time is another dimension of performance. Performance can be

measured for a task, for a day, for a week, for a month, a year or for life. The time period for performance is important. In information technology organisations, performance is evaluated over a quarter or a three-month period. They may also be defined by tasks or project and time, i.e., a combination. However, time is the most popular dimension used for formal PM.

Focus dimension: Performance also has a focus dimension. The focus can be on anything.
For example, a students focus could be to learn more or get more marks. Similarly, in defining the performance of a sales executive, the focus of performance can be on market share, profits, new areas covered, etc.

Quality dimension: The outcome of performance should be of a good quality. For

example, a manufacturing company which has a target of 200 pieces per day may reach the target, but if the quality of the product is inadequate, performance could be a failure in the ultimate analysis. Thus a quality dimension may be laid down and is usually done, although today, quality is assumed.

Cost dimension: Cost is another dimension of performance. Costs may be financial, or

with respect to time and effort. For example, if an organisation wants to reduce its costs it may do so by giving key result areas (KRA) to manufacturing to reduce waste and/or giving KRA to the purchase department to reduce the purchasing costs and/or reduce inventory cost. You can now see how the cost dimension translates into KRA for individuals.

Q.2Assume that you have joined as an HR in an organization. The first task assigned to you is to conduct the Performance Appraisal Process. What according to you is its purpose? Describe the entire Performance Appraisal process.
(A) Explain the purpose of Performance Appraisal. (B) Explain the Performance Appraisal Process.

Ans.2(a) Purpose of Performance Appraisal It is believed that at least 90% of

organisations have a formal PE and the rest do it informally since it serves a number of organisational purposes such as the following: 1. If organisational goals are converted into objectives and job tasks and these are executed by employees, it follows that the effectiveness with which tasks are performed has a direct bearing on organisational effectiveness. PE identifies whether an individual is actually contributing to the job. For example, five salesmen each are required to sell 1,000 pieces of a product a month to ensure that the organisational target of 5,000 sales is met. If three of them sell 1,200 each, another 1,000, but the fifth only 200, the organisational targets will fall short. Through PE we can pinpoint which employee was the reason for the shortfall and how his/her performance can be improved, which, in turn, will improve organisational performance. 2. It helps in giving feedback of the performance, which, in turn, helps in performance improvement. In the above example, if the fifth salesperson is given feedback and he/she also sells 1,000 pieces next month, then the organisation will not only meet but exceed the target. 3. Below par performance, as in the case above, can also indicate training needs. It may be possible that our salesman in question is not able to sell because of some skill deficiency such as lack of product knowledge or persuasive communication. He can be trained in the skills he is lacking so that he can meet the organisational goals. 4. It gives insight into the contribution of employees and enables an organisation to categorise employees into high value, medium value, etc., for promotion, compensation, retention and retrenchment. If a person lags behind despite sufficient training, it is natural for the organisation to feel aggrieved and stop his promotion, increment or terminate him for which neither party should have any ill feelings because it is the consequence of not fulfilling his/her targets despite being given organisational support. 5. It acts as a control measure and helps in evaluating the efficacy of the job and identify whether the incumbent requires more competency or resources to execute it effectively. For example, if the organization realises that the other sales staff had their own vehicles, but the person who is lagging behind is using public transport, perhaps, there is a case to provide him with assistance to procure a vehicle (additional resources) to enable him to perform. 6. It strengthens the communication between the subordinate and the superior as the superior is able to intimate the requirements clearly and the subordinate is also able to convey how he has fulfilled these. Moreover, in the above case, existence of the evaluation enables a meaningful communication between the manager and the sales executive.

7. Reduces grievances because it is systematically comparable. 8. Gives vital input into strategic decision making since the evidence of existence of high levels of competency in the organisation encourages investment decisions, expansion and the like. 9. It is important for succession planning. 10. It is a vital input to see if recruitment and selection has been effective and gives insight into the way we create job description, publicise jobs, select and induct. 11. It facilitates meeting several statutory requirements and often acts as an important input in HR-related legal cases. 12. And above all, it makes a major difference to the self-worth of the individual, his feeling of self-efficacy and self-confidence.

(b) Performance Appraisal Process

At the end of the PM cycle, the employee fills a self-appraisal form. This process involves the -appraisal form and submits to the manager: This is done in format similar to Part II of the PM planning format we saw in the earlier section and is the starting point of PA. In relation to each objective and KRA, the individual will record his performance as evaluated by him. The evaluation may be figurative. For example, met expectation, exceeded expectation, did not meet expectation, etc. It is advisable to have a column for remarks in which the employee can record the reasons for not meeting the expectation or to record the critical incidents based on which he is claiming the performance.

1.Manager concurs or differs with the self-appraisal: When he/she does not
concur, it is normal to give reasons or site critical incidents to substantiate that. While concurring, he may agree with the incidents that the employee has cited and may add to them.

2Manager sets up a meeting with the employee: This is done on a one-on-one

basis and, perhaps, will take 45 minutes to one hour. The manager should prepare in advance about the feedback he has to give.

3.They develop a dialogue and jointly evaluate the performance: This is

the most important, yet most hated part of PA. If the employee has performed well on all sides, then it is fast, easy and comfortable for both. If not, the manager has to give feedback (which is discussed in detail in subsequent unit). The problems come up because the employee may have supported the manager in several ways but may have failed in actual performance objectives or

he may not have supported the manager in general, but may have achieved all the objectives successfully. This makes the dialogue difficult.

4.The manager fills up the final report of the achievements/shortfalls and gives it to the employee: This is important because it is linked to reward,
promotions and development. The manager has to be objective.

5.Employee concurs or gives a rebuttal: The employee should be given a chance to

rebut the decision of the manager. This is important to meet the ends of justice. The concurrence and rebuttal should be recorded and signed by both.

6.Rebuttal is recorded and responded by the manager: If the employee

rebuts the manager, this should be recorded as evidence. The employee usually will reserve the right to represent his case to higher levels of management. The manager should, therefore, be sure of the reason why he is grading someone at a particular level, have justification and, more importantly, have the conviction of his grading.

7.The documents are sent to HR for record: The documents are processed to HR
for post-appraisal actions.

8.Post-appraisal actions: It is the means for identifying various human resource

decisions with respect to the employee by taking appropriate actions. It is based on the information revealed by the appraisal. Ultimately, the appraisal records are consigned to the personal file of the employee for future reference.

Q.3Discuss the components of a Performance Appraisal feedback. Describe the steps in giving a constructive Feedback. (A)Explaining the components of Performance Appraisal Feedback. (B) Explaining the steps in giving a Constructive Feedback. Ans. Components of performance AppraisalFeedbackFeedbacks are effective if
we ensure that they are designed well. A feedback has four components as follows:

Context: It describes the situation and one should be as specific as possible. For a feedback
related to context of keeping appointment, you might say keeping appointment with our customeSince they are high-net worth customers and all of them want personal attention and that too immediately, they tend to call you often and there is always scope for clash of timings.

Behaviour: Describe the behaviour as clearly as possible. An example: Last week you had
worked with a lot of clients and you must have been pressed for time. I can see that you had a series of tough sales calls and you have completed them all successfully. Mr. Gopal changed his appointment twice causing you considerable problems. However, you managed to re-plan the visit and meet him whenever he desired to.

Impact: What was the positive or negative impact of the behaviour? An example, Gopal had
called me to tell me how diligent and time conscious you are, and, in fact, he was apologetic for changing the appointment twice.

Next step: What kind of changes in behaviour is important or

the importance of continuing

to do something which is an important positive behaviour. An example, I really appreciate it and hope that you will continue to do so. It really shows your commitment to work. rs is a challenge.

(b) Steps in Giving a Constructive Feedback: You can learn to give a good feedback if you keep in mind the following steps.
Step 1: State the constructive purpose of your feedback or context: State your purpose briefly by indicating what you'd like to cover and why it is important. If you are initiating feedback, this focus keeps the other person from having to guess what you want to talk about. If the other person has requested feedback, a focusing statement will make sure that you direct your feedback towards what the person needs. For example: "I have a concern about... " "I feel I need to let you know." "I want to discuss." "I have some thoughts about." Step 2: Describe specifically what you have observed or give the observation: Think of a certain event or action in mind and be able to say when and where it happened, who was involved, and what the results were. Stick to what you personally observed and don't try to speak for others. Avoid talking vaguely about what the person "always" or "usually" does. For example: "Yesterday afternoon, when you were speaking with Mrs. Sanchez, I noticed that you kept raising your voice."

Step 3: Describe your reactions or the impact: Explain the consequences of the other person's behaviour and how you feel about it. Give examples of how you and others are affected. When you describe your reactions or the consequences of the observed behaviour, the other person can appreciate the impact their actions are having on others and on the organisation or the team as a whole. For example: "The staff member looked embarrassed and I felt uncomfortable watching the episode." "Shouting at our students is not an acceptable behaviour in this department." Step 4: Give the other person an opportunity to respond: Remain silent and meet the other persons eye, indicating that you are waiting for an answer. If the person hesitates to respond, ask an open-ended question and listen with an open mind. For example: "What do you think?" "What is your view of this situation?" "What are your reactions to this?" "Tell me, what are your thoughts?" Step 5: Offer specific suggestions: Whenever possible make your suggestions helpful by including practical, feasible examples. Offering suggestions show that you have thought past your evaluations and moved to how to improve the situation. Even if people are working up to expected standards, they often benefit from ideas that could help them to perform better. If your feedback was offered supportively or neutrally, in the "for- your-information" mode or depending on the situation's circumstances, suggestions may not be appropriate. Use your common sense and offer anidea if you think the other person will find it useful. Don't drum up a suggestion for improvement just for the sake of it. For example: "You know I always write notes or put up signs to remind myself to do something." Step 6: Summarise and express your support: Review the major points you discussed. Summarise the action items, not the negative points of the other person's behaviour. If you have given neutral feedback, emphasise the main points you have wanted to convey. For corrective feedback, stress the main things you've discussed that the person could do differently. End on a positive note by communicating confidence in the person's ability to improve the situation. For example: "As I said, the way the group has figured out how to cover phone calls has really lessened the number of phone messages to be returned. You've really followed through on a tough problem.

Q.4Discuss the skills that a line manager require for effective Performance Management. (A)Listing the skills . (B) Explaining the skills.

Ans. Skills the line managers require for effective PM. The line managers require

the following skills for effective PM:

Preparing role profiles defining key result areas and competency requirements. Often
this is done by the HR managers without consulting the line managers. The reason is that there is a particular format in which this has to be done and perhaps the HR managers, by training, have the ability to do so. However, roles are executed under the line manager and he can be considered as the subject matter expert (SME) in so far as role profiling is concerned. Hence the line managers should not only be trained to prepare the role profile but also be engaged fully in the process. This will make them realise that the roles will be executed as per their requirement if, and only if, they manage performance.

Defining goals: Often it turns out that the goals received from the top management is
neatly cut into pieces and distributed to the departments and teams. With experience it may be possible for HR to do this, but getting the employee and the line manager involved in a dialogue and making them define the goals for themselves will ensure that the line manger provides support to accomplish the goals. In fact, when so done,the line manager will take the ownership of the goal along with the employee.

Identifying and using performance measures: This is yet another area where the
tacit knowledge of the line managers should be fully utilised so that performance measures can be made in a way the employee and the manager understands it. Often, the line managers are experts in identifying the key measure that will make an employee deliver. An HR manager may give the average production as the production expectation or use an incremental method to set the goal while the line manager can give measures that suit the employee. For example, he should produce 100 pieces a day even though the average number of pieces expected is only 80. The line manager knows best that an employee can easily produce 100 pieces while another can produce only 70. Thus it is easy for him to customise measures.

Giving and receiving feedback: This is indeed one of the major problems for the line
manager. Usually they shy away from it. This is because the line manger feels that he will hurt the feeling of the employee when he gives a poor performance feedback and that the employee may have negative feeling which in turn affects production. The reality is vice versa. Feedback also involves some expertise in managing emotions. Hence the line managers have to be trained in doing so.

Taking part in the performance dialogue: This is yet another area which the line
manager cannot address without due training. For a line manager, daily production is the

crucial issue and therefore he often finds that getting involved in a performance dialogue is a waste of time. However, once he realises that his ability to control production, which is undoubtedly his focus, is better achieved through performance dialogue, he agrees to take part in performance dialogue.

Identifying the learning needs and arranging for learning and development: The line manager is perhaps most suited to identify the learning
requirement of the employee. Usually, the line manager complains when an employee has to be sent for training as he loses a working hand; but if he is convinced that the rise in productivity of the employee more than makes up for the time lost, he would be willing to handle it better and, more importantly, help the employee to put the new skill into practice.

Diagnosing and solving performance problems: A line manager is constantly

with the employee and can therefore observe and identify the problem of production and rectify these in time.

Coaching: A line manager is the person who can act as a coach and mentor to the employee
because of the day-to-day proximity and interpersonal relationship that he enjoys. It is possible that he does not have the skill to do it; but can be easily trained in it.

Q.5Describe the modern methods of Performance Appraisal Explain all the five modern methods of Performance Appraisal. Ans.