DRIVE

PROGRAM
SUBJECT CODE & NAME

Fall 2015
MBADS (SEM 4/SEM 6)
MBAFLEX/ MBA (SEM 4)
PGDHRMN (SEM 2)
MU0016 Performance
Management and Appraisal

Question 1: Discuss the aims of Performance Management.

Answer: First, it is clear that PM has some objectives and purposes for which it is conducted.
To measure goal achievement, to identify short falls, to identify strengths and weakness, to
evaluate the adequacy of effort, to assist in enhancing standards, to ensure alignment to the
goal, to facilitate feedback, to enable personal growth are some of the aims of PM. We also
linked PM to one of the most important aspects of performance in the information driven
service economy, i.e., employee engagement. The understanding that employee engagement
elicits discretionary efforts from the employees and that leads to exceptional performance is
very important to help us design a PM. The discussion also revolved around the role of PM in
creating that engagement.
Aims of Performance Management
To measure goal achievement: Overall evaluation of a company and its ability to set and
reach goals is critical for success. While several external factors such as economy, demand,
etc, may affect the organisational performance, we should acknowledge that goal achievement
is more related to effective employee performance. Hence goals such as enhancing market
share, increasing client satisfaction, etc., are to be delivered by the employees. Hence, in goal
achievement the employees and their performance have the primary role.
To identify the shortfall areas: Another objective is to discover where employees and the
company are falling short. This is done by going through details such as profits earned per
employee, new clients acquired and the contribution of employees in making these things
happen.
To identify strengths and weaknesses: If employees have the primary role in delivering
goals, and there is a shortfall, then it follows that their strengths and weaknesses are important
ways of identifying the shortfall. PM, therefore, has the objective of measuring the strength and
weaknesses of an employee. Often it is possible for an employee to contribute more. It is also
possible that the employee may be a better fit in another job and redeployment may be in
order. Equally, he may have some weaknesses which when mitigated will help in overcoming
the shortfall. PM intends to facilitate these.
To evaluate the adequacy of effort: An employee may have the strengths but he may fall
short in effort to produce the required result. PM is a direct measurement of this. While it may
be argued that output is not always the result of effort, the objective of PM is to check whether
the shortfall is due to lack of effort, resources, or techniques.
For timely remedial action: To identify and remedy situations that hinder company
performance is another important objective of performance management. This includes
training, replacing underperforming employees, developing new strategies for reaching the
goals and discussing strategies that have worked in the past.
To evaluate leadership adequacy: The inability of a company to meet the goals is often due
to poor leadership, poor planning, poor implementation or poor employee performance.
Economic factors also play a major role, but it is 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. PM is a good check of its leadership efficacy
to do this.
To test the efficacy of teamwork: 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. PM, therefore,
tests the efficacy of teamwork.
To assist in enhancing standards: PM contributes to enhanced standards of work
performance of an employee or class of employees.
To ensure alignment to the goal: To ensure that the employees work towards the defined
goals is an important aim of PM since it is possible that employees are working hard but not
towards the organisationsal goal and, that too not in an appropriate manner.
To facilitate feedback: While it is accepted that employee should be given feedback as often
as possible, PMs aim is that the employees receive at least the minimum required feedback at
regular intervals.
To enable personal growth: To assist the employees to achieve personal growth by acquiring
relevant knowledge, skills and attitudes.
To enable a conversation: PM is perhaps the ideal method for an intimate one--one
conversation with the supervisors. This in turn creates an excellent work atmosphere.
Question2: Discuss the steps in giving a constructive feedback.
Answer: Feedback: Feedback is a useful tool for indicating whether things are going in the
right direction and for redirecting effort. Information about an employees performance returned
to the concerned employee. The performance appraisal procedure is incomplete without the
feedback given to the employee about the appraisal and their performance. Most people would
prefer not to receive feedback on how they are performing their job, because no one likes to
hear a negative feedback. We transfer our negative feelings about the information we receive
to the person who was unlucky enough to be the one who delivered the bad news. This will
obviously do little to help those receiving the feedback improve their performance and grow
personally and professionally.
Steps in Giving a Constructive Feedback:
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 an idea 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, emphasis 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. Please keep taking the initiative on problems like that.
By summarising, you can avoid misunderstandings and make sure that your communication is
clean. This summary is an opportunity to show your support for the other person a way to
conclude even a negative feedback situation on a positive note. For example: "At least we
understand each other better since we've talked. I'll do what I can to make sure your priorities
are factored into the schedule, and I'll expect you to come straight to me if the schedule is a
problem.
We can see this in the following example of a feedback. The situation is that Shekar Handa is a
sales executive catering to high net worth individuals in a bank. He fully satisfies his
customers; whereas his colleague Rajori Singh is quite the opposite. We have already seen a
sample feedback given to Shekar. Let us now see Rajoris. I have something important to talk
to you regarding keeping appointments. Keeping appointment with our customers is a
challenge, but it is also the organisations core. Since 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 (context). Last week, you 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,
but you had problem keeping the appointment with Gopal. True, that he had changed the
appointment twice, but with a little flexibility, you could have met him in the club as he had
suggested, which you did not (behaviour). I was quite surprised you brushed aside a highvalue customer like Gopal, which I would never dare to. Gopal had called me to tell me how
indignant he was and was on the verge of shifting from us (impact or reaction). I wonder what
happened and do you have something to say on this (opportunity to explain)? I am concerned
about your rigidity and lack of concern with such clients. If you cannot meet the person for any
reason, you should alert me in time so that I can make alternative arrangements (next step or
suggestion). I hope you will keep in mind the importance of high net worth customers, their

compulsion to change appointments because of their busy schedule. Should you have a
problem for a meeting with customers like Gopal, you should quickly alert me and I hope you
will take all the steps to show flexibility in keeping such appointments (summarizing).
Question 3: Assume 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.
Answer : Purpose of Performance Management
Performance Management (PM) is a system that connects the individual goals to the
organisational goals and therefore has a special significance in organisations.
The purpose of performance management can be broadly classified into driving results,
building capability and growing talent. Let us explain them in detail:
Driving results: The purpose of performance management is to drive improvement in
business results through individual, group and enterprise goal alignment, measurement,
performance coaching and performance information sharing. A performance management
process developed to drive the achievement of key business results is designed to make
sure that the goals and expectations of the organisation, team and individual are clearly
defined, are focused on key priorities and are well-connected to the drivers of results.
Consider a situation where you want to work on training employees because of your liking for
the job and confidence about being able to do a good good job and your company is looking
for someone to drive their training as new projects are expected soon. By giving you the
training responsibility, the company can drive higher results from you, which happens to be
the priority area of the company. This is how an organisation can drive results through PM.
Building capabilities: Performance management drives organisational and individual
capability development by clarifying role-specific goals and competencies, creating an
environment of constructive feedback, and using formal developmental coaching or
mentoring. A performance management process intended to drive capability development is
developed to make employees understand what they need to learn and how they would go
about doing it. Employees are expected to be in a constant growth and learning mode.
Coaching and mentoring helps employees to learn the skills, behaviours and knowledge that
are critical to the organisations ability to execute its business strategy. The HR manager
defines those, and you as the training manager go through the PM reports, finds those with
the competencies, though of a lower level than required, and find specialists to train them.
You were able to have adequate people for the new projects in time. You would have built
capability in the company by the initiative that you have taken and you would also realise that
it was easy to do it only because the PM reports contained the information to act upon.
Growing talent: Another important purpose of performance management is to motivate and
retain high performers by providing career development programmes that include motivation
and reward strategies, challenging work assignments and other on-the-job learning initiatives
that will lead to career advancement and job satisfaction. A performance management
process for identifying and rewarding talent is developed to assess performance. The results
of these assessments can be used to make decisions involving work assignments, career
advancement and recognition. For example, Mr. X, a young manager looking after the
international business, did a good job and the PM system reported highly on him about his
international business acumen and cultural sensitivity. It is now possible for the HR to expose
this person to an expatriate job in another country for two to three years and then move him
to head an international operation at some point of time. This is the way PM grows talent.

Performance Appraisal Process

Employee fills the self-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, 5/10,
7/10, etc., or descriptive. 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. Rating method is discussed in detail in the next unit.
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.
Manager 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.
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.
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.
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.
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.
The documents are sent to HR for record: The documents are processed to HR for postappraisal actions.
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.

Question 4:Explain the concept of 360-Degree feedback system. Discuss the

purpose and components of a 360-degree appraisal method

Answer : Concept of 360-Degree Feedback System

In 360-degree appraisal, the feedback about an employees performance comes from all the
sources. The number (360) indicates all-round appraisal. While 180-degree refers to topdown and bottom-up feedback, numbers more than this indicate feedback from various other
groups apart from the top-down and bottom-up across the organisation. For example, these
additional groups can be peers who are engaged in the same level of job as the recipient of
the feedback.
Hence, it could be said that 360-degree feedback is the organised collection of appraised
data of an individual or group, obtained from several stakeholders.
The data collection is organised, i.e., prepared in a systematic way through aptitude tests or
interviews. There is both collection of data and a feedback process; data is collected and
then fed back to the individual to promote perceptive, recognisable and, finally, behavioural
change. The performance of both an individual and a group can be calculated. Stakeholders
are the sources of data. They answer certain questions about the behavioural attitude of
individuals. Here, stakeholders are people who are affected by the individuals performance
and also interact with the individual in their day-to-day tasks. Figure 9.1 depicts a 360-degree
feedback system.

Thus, 360-degree feedback signifies transition from top-down, single-stakeholder appraisal and
results that are much more diverse and related to processes.
Purpose
A 360-degree feedback helps an organisation to take decisions in the following areas:
Self-improvement and individual analysis
Associate training program
Team-construction
Managing performance
Strategic or planned organisation development

 Validation of training and other initiatives

Reward management.
Annual assessment by way of 360-degree feedbacks assists in the management and monitoring
of values, approving the prospective goals and assignment of responsibilities and tasks. A 360degree performance appraisal is usually integrated into the yearly compensation and grading
reviews, which normally leads to business planning for the next financial year.
A 360-degree performance evaluation commonly reviews every individual's performance against
the goals and strategies for the previous financial year that were approved and agreed upon at
the previous evaluation sessions. Performance evaluations through a 360-degree appraisal are
also necessary for developing goals and business strategies for individuals, critical jobs, and for
the association as a whole.
Moreover, since a 360-degree feedback provides a proper, confirmed, frequent and regular
review of an employee's performance, and objectives for further development, it is essential for
staff motivation, bringing about a change in the attitude and behaviour of the employee and
discussion and implementation of individual and organisational aims. This will encourage
positive connections between the administration and the employees.
Following are the tasks that a 360-degree feedback can assist in, when managed appropriately:
Performance measurement clear, precise, long-term explanation, defining and revising
priorities and objectives.
Motivation through objective and target approval.
Motivation though success and feedback.
Educational desires and training needs evaluation and agreement.
Identification of individual strength and abilities, including unexploited hidden strengths.
Defining the career and growth strategy both individual and managerial.
Creating mutual awareness, understanding and relationship.
Clarification about the teams role and structure.
Assessment and analysis of organisational training needs.
Developing a common perspective between an employee and his manager, removing
confusions and errors through interaction and connection.
Support and communicate organisational theories, ethics, objectives, plans and preferences
and so on.
Future prospects and recommendations
A 360-degree feedback is useful because it makes it easy to gather probable feedback about
specific issues that are otherwise hard to identify. However, it needs to be used with care so as
to ensure maximum benefits. Here are some suggestions for avoiding problems while
implementing a 360-degree feedback process:
Learn about the technology first. 360-degree feedbacks are changing very rapidly. What
was not possible earlier with a 360-degree feedback system is now easily achievable.
Modernisation in 360-degree systems has made it easier to get feedback, making it, in turn,
more acceptable, more reasonable, more flexible and more diverse. At the same time, not all
organisations are able to innovate at the same speed or in the same way. This makes it difficult
for the inexperienced user who is at the learning stage. However, a systematic review of what is
accessible will ensure that the 360-degree feedback system provides maximum benefit in the
given circumstances.

The following areas need to be addressed first to ensure that an organisation is ready for
implementing a 360-degree feedback process:
o Climate of trust in the organisation;
o Organisational strength;
o Feedback practices;
o Development practices;
o Responsiveness and recognition of 360-degree feedbacks;
o Availability of computers.
Use well-examined, well-structured research items. A 360-degree feedback process is
only as effective as the items that make up the survey. The research methodology should be
carefully structured and
locally authorised. This is best done by customised survey platforms of modern approach.
Protect privacy. People give honest feedback only when there is a benefit in doing so. The
360-degree feedback system should be so designed that ratings and raters are kept secret and
supervisors are given only the data they need.
Use skilled personnel. It is best to select people who have successfully implemented a 360degree feedback process before to lead these meetings.
A 360-degree feedback cannot improve the performance of an employee on its own. It can
focus on priority, development requirements of the individual and create a desire to change, but
development of a strategy for individual growth, training and encouragement of developmental
actions are essential to obtain optimum results.
Methodology
The 360-degree appraisal has four essential components:
Self appraisal
Superior appraisal
Subordinate appraisal
Peer appraisal.
Self appraisal: Self appraisal allows the employee to compare his/her abilities, limitations,
success with others and judge his/her own performance. Self evaluation is an essential part of a
360-degree appraisal and therefore, has a powerful effect on attitude and
performance. It provides a "360-degree evaluation" of the employees performance and is
considered as one of the most realistic performance appraisal methods.
Superior appraisal: Superiors appraisal follows the traditional concept of performance
appraisal, where an employees tasks and actual presentation is rated by the superior. This form
of evaluation involves the assessment of individuals by supervisors on pre-determined
parameters, along with the evaluation of the team and the work scenario by senior managers.
The superiors (supervisors and senior managers) can modify an employees or a teams given
tasks on the basis of the assessment of the individual and the team.
Subordinate appraisal: Subordinates evaluate a superior on parameters such as
communication, convincing ability, leadership quality, ability to assign work in an equitable way,
etc.

Subordinate appraisal is extremely helpful in identifying and addressing developmental needs. It

can be used for evaluating record sheets, but it should be ensured that the subordinates are
appraising parameters of which they have knowledge. A subordinates feedback is especially
useful for evaluating the supervisors interpersonal skills. However, it may not turn out to be as
effective for measuring task-oriented skills.
Peer appraisal: Peers of an employee generally have an exclusive point of view on the
colleagues job performance. They are also very open to the idea of rating each other. Peer
ratings are included when the individuals capabilities are known or the result of the
performance can be computed. However, the pros and cons must be considered before
including this type of feedback in an all-round appraisal program.
Used as an effective developmental tool and conducted at regular intervals, a 360-degree
feedback system can help keep track of changes in perceptions about employees. A 360-degree
appraisal is considered to be more appropriate at the managerial level, as it helps evaluate their
leadership and supervision styles. This appraisal method has been successfully used around
the world for improving employee performance. Some of the companies that have been
successfully implementing 360-degree appraisals are TCS, Microsoft and Wipro Technologies.

Question 5: Define the term Ethics. Discuss the key factors involved in ensuring Ethics
in Performance Management.
Answer :
Ethics An Overview
The word 'ethics' comes from the Greek word 'ethikos'. It refers to one's moral character and the
way in which society expects people to behave in accordance with accepted principles. Most
philosophers conclude that ethical failure occurs because of lack of character or, in other words,
virtuous people will live ethically. Therefore, we need to think about the desired virtues and how
one can develop those virtues, PM being a case where such ethics need emphasis. Aristotle's
virtues for the city state included prudence, justice, courage and self-restraint. Christians added
faith, hope and love. Over time, a number of others were added compassion, generosity,
empathy, hospitality, modesty and civility. Society today is more egalitarian and democratic and
business systems are a powerful entity in the social systems and hence the importance of
business ethics. Since PM is the system through which the people in the business and the
business interact, it is important to focus on ethics in the PM system also.
Dimensions of Ethics :
By normative ethics we mean the study of ethical action. Broadly speaking, normative ethics
can be divided into the sub-disciplines of moral theory and applied ethics. In recent years, the
boundaries between these sub-disciplines have increasingly been dissolving as moral theorists
become more interested in applied problems and applied ethics is becoming more
philosophically informed.
Professional ethics refers to the ethics that professional people and those working in
acknowledged professions should exercise in relation to the specialist knowledge and skill that
they employ. How the use of this knowledge should be governed when providing a service to
the public can be considered a moral issue and is termed professional ethics. One of the best
examples of professional ethics is enshrined in the Hippocratic Oath to which medical doctors
still adhere to this day.

Social ethics come from someones collective experience of people and cultures. While ethics
are typically driven by individual morals that determine right or wrong, ethics within society focus
more on what may be considered appropriate behaviour for people as a whole, rather than
individual behaviour in a social context. Social ethics cement the society and ensure its smooth
functioning.
Personal ethics is what an individual considers as ethics. It is dependent on his upbringing and
environment besides the impact of the society but is very individual in nature.
Ethics in Performance Management
Importance of ethics in PM: So far, we have had an overview of ethics and its relevance in the
organisational context. In this section, we are more concerned about how it can be incorporated
in PM and how PM can be made more ethical. Since most people attach a high value to ethics
and all people are affected by performance management in an organisation, we can conclude
that all people in the organisation would be concerned about ethics in PM. Also PM acts as a
guard in business ethics by including that as an evaluation criterion, i.e., PM reports whether an
individual has the ethical standards that are expected of him as defined by business. PM affects
certain key aspects of an individual. It affects the career, life, financial rewards, and
retrenchments and through these, the self image of an individual. This underscores the
importance of ethics in PM.
Concept of PM as related to ethical aspects: For instance, conventional wisdom might
indicate that PM, in its various forms, is a natural outgrowth of an economic system based on
profit maximisation, economic efficiency, and economic productivity. It probably emerged during
the era of scientific management (refer to Management Process and Organisational Behaviour
material to know more about scientific management) to measure productivity. In fact, through
PM, we are trying to measures the skill of an individual and, therefore, economic efficiency. We
may find that the cost of designing and implementing PM is greater than its benefits, in which
case, the entire system is questionable from an economic perspective. It could turn out that we
are simply relying on economic indicators to judge human performance. There can be other
criteria to judge the worth of a person. Kant, a noted author on philosophy and ethics believed
that motive or intention is a better measure of a person's character than is the performance of a
given action which tends to question the premise of PM itself.
On the other hand, Aristotles view is that moral worth is derived from the repetition of virtuous
activities, i.e., end actions can be assessed. Besides, economic efficiency, PM is also used to
measure socialisation skills, for example, a teacher in primary school is as interested in
measuring 'self-control' and 'peer acceptance' as he/she is interested in measuring
mathematical skills and in many ways the manager is also as interested in these. Thus
socialisation can be, and is, evaluated without any specific concern for eventual economic
impact. This means that PM is not restricted to any one area of human activity and is pervasive
and hence fully justified in the organisational context too. Thomas Jefferson spoke about
natural aristocracy' or a natural order of things, i.e., some people are destined to lead and
others are destined to follow. So PM is about finding this out. Thus, performance evaluation may
be ethically sustainable as a concept but without implementing it keeping the equality of
opportunity and justice in mind, it will still not be ethical. If these are not ensured, PM becomes
an unreliable measurement of personal worth and job performance and hence suffers when
valued in the light of ethics. Conversely speaking, PM can also be seen as a valid way to justly
distribute rewards and punishment. By now you may have realised that there are many
unsettled issues in ethics as pertaining to PM. Naturally, this leads to several ethical dilemmas:

Ethical dilemma 1: Use of trait-oriented or subjective evaluation criteria: These criteria are
flexible and hence evaluators generally like this. This is often ethically questionable. Favouritism
or vengeance can often take place during appraisal. Managers are often self-righteous and feel
that they know their people and best performers and that an objective system is an impediment.
Some managers have expressed the feeling that objective-based systems 'tie their hands' and
restrict their decision-making autonomy. Despite these objections, the fact is that subjective
evaluations are inherently unfair; different raters can treat the same behaviour or set of
behaviours differently (reliability related challenges) and there is no necessary agreement on
what constitutes 'good performance' (validity related challenges). Hence it is important to create
objective measures. We have seen how to create these, including Behaviourally Anchored
Rating Scale, in earlier units, however imperfect these may be.
Ethical dilemma 2: Problems in the writing of performance standards and
measurement indicators: In a standards based system, the key is to write job standards
(quantitative, time-oriented, realistic, and job-related) that truly reflect the critical-performance
dimensions of the job. This is often not done. In order to avoid subjectivity, we may lean too
heavily on quantitative standards with its own yardsticks. In fact, this has been the theme in
most of the units. Often it is true that the most important part of a specific job is qualitative and it
is difficult to measure (for example, the political skills of a manager). As a result of this, rewards
may go to the person who deserves it much less because of poor numerical grading. Hence, it
is important that quantification is done with due care.
Ethical dilemma 3: The use of different PA systems within the same organisation: This
might look strange to many but it is often done in organisations. From an ethical point of view, it
is unjust to judge one category of people with one yardstick while judging others with another
even if the argument is that it is not possible to quantify the performance of the latter category.
Those being rated (ratees) under the subjective system can be either 'underrated' or 'overrated'
in comparison with the
peers in the objective rating category. Clearly, the resolution to this dilemma is to develop
consistency through the establishment of organisation-wide objectives or the implementation of
a standards-based system.
Ethical dilemma 4: How are the results of PA to be used? Ideally, PM should become the
basis for the entire human resource system to include managerial succession planning,
bonuses, promotions, educational opportunities, human resources planning, and so forth. If this
has to act as a cornerstone, it has to be objective, valid, and reliable. The quality of the job
standards or objectives is therefore crucial from an ethical standpoint. Poor standards occur
often because they are hastily written and if these poorly written ones are used for
administrative decisions such as bonuses, they can actually reward incompetence and ignore
good performance. At times, the information from PM can also be used capriciously or arbitrarily
to the detriment of the employee, for example, for retrenchment during a lay-off or economic
downturn. If such abuses continue, it can permanently damage the credibility of a PM system.
The resolution to such a dilemma requires a number of steps:
Ensure that adequate time is spent in developing the performance standards.
Ensure that the standards are objective, reliable, and valid.
o Ensure that the information gathered from PM should not be used capriciously or arbitrarily
and measures to protect the employees are in place, such as the right to rebuttal and the
presence of an ombudsman.
o Each employee must be informed as to how the information from the PM is to be used.

 Ethical dilemma 5: Who determines the objective standards? Though we profess

otherwise, the role of the ratee in PM has been and continues to be passive. While the
participation points such as dialogue, joint goal setting, etc. have been discussed in earlier units,
in reality, employee participation has been largely restricted to certain forms of PM such as
mutual problem solving. The normal managerial tendency is to write the standards for the
employee and to impose them on him/her. It is also important to note that if employees design
the standards, they can be too 'soft'. The optimal solution seems to be the use of 'knowledge
experts' (both subordinates and superiors) who collectively specify the key dimensions of job
performance and measurements of those dimensions.
Question 6: Write short notes on the following:
a)Forced Distribution Method
b)Essay Appraisal Method
Answer : Forced Distribution Method
Forced distribution method has its roots in normal distribution, a topic found in statistics. The
employees should normally be very good, good, average, below average, bad, etc. In other
words, the rating should be evenly spread. In forced distribution method, the manager is told to
ensure that people are evenly spread. Thus, he has to fit some percentage in very good, some
in good, etc., with some discretion. It is generally applied to several components taken together
rather than one component. For example, you do not do force distribution for honesty separately
and team spirit separately. You take the persons performance as a whole and then do the
forced distribution. Forced distribution is primarily used to remove rating errors such as
compassion and centralisation, but the process itself can cause rating errors because it forces
subtle differences between employees even where job performance is quite similar. For
example, even if every employee in a unit is doing a good job, the forced distribution method
suggests some of them to be placed at the bottom of a graded range. For this reason, this
method is not accepted, particularly in small groups or where all the group members are equally
talented.
Essay appraisal method
In the essay appraisal method, the appraiser describes the performance of an individual in the
form of a short essay. He covers what the employee did, what he did not, what his strengths and
weaknesses are and what he should improve upon. When facts and evidences are used
objectively, it is a fairly accurate method to evaluate performance. However, if an organisation is
large, the variation in the description will be so much that an objective view will be difficult. Since
essay appraisals are unstructured and undefined, they suffer from the following anomalies:
Lack of consistency is a major problem and an appraiser may well write two different stories
at two different times.
It is highly susceptible to an evaluators bias.
It is susceptible to the appraisers language and interpretation of others who use it.
It may result in emphasising behaviours not related to the job and, more importantly, not
emphasising on job-related behaviours or results. It may draw a blank in giving insight into the
performance.
This does not generally represent a clear picture of the employee or the job, which reduces
the reliability of the method.