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PERFORMANCE APPRAISAL

By Shruti Dubey & Neha Bhatwadekar

ABSTRACT
Now a days when hirerchy is being replaced by leadership ,teamwork, employers need to choose another alternatives which will support and enhance personnel development. Organizations are focusing on more productivity by using less resources. Now a days layers of management arebeing reduced causing increased work loads and supervisors are managing larger work groups with larger spans of control. Different methods of performance appraisal are followed in different organizations to achieve the above objectives. Some methods of performance apprasial are complicated and call for adequte knowledge in quantitative techniques ,like traditional method of preformance apprasial . While modern nethod as the basis for evaluating job performance of their employee. Supervisors with increased workloads and a large number of reporting relationships lack theopportunity to observe and provide fair, accurate, credible and motivating performanceappraisals. The purpose of this research project was to gather information that will help in eveluation and development of a accurate, fair performance apprasial system. This research project utilizes an evaluative research methodology.

The following questions were answered while completing this project. 1. What is performance appraisals? 2. Should performance appraisal be used for development or for management decisions such as raises and promotion also? 3. What are the advantages and disadvantages of performance appraisal?

The results of this research project confirmed that most organizations are using the traditional supervisor-to-subordinate appraisal. It also concludes that multi assessors increase validity and that subordinates and peers are in a better position to provide accurate feedback to their supervisors and co-workers. The survey concluded that personnel are dissatisfied with the traditional performance appraisal and are willing to evaluate their superiors, peers and subordinates. The recommendation is that personnel growth and development will be more probable with the adoption of performance appraisal.

TABLE OF CONTENTS

Page Abstract................................................................................................................... 2 Table of Contents.................................................................................................... 4 Introduction............................................................................................................. 5 Background and Significance................................................................................. 6 Literature Review..................................................................................................... 7 Method..................................................................................................................... 8 Results....................................................................................................................... 9 Recommendations.................................................................................................15 References................................................................................................................. 17

INTRODUCTION

Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all. If nothing else, the existence of an appraisal program indicates to an employee that the organization is genuinely interested in their individual performance and development. This alone can have a positive influence on the individual's sense of worth, commitment and belonging.

The strength and prevalence of this natural human desire for individual recognition should not be overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if more attention were paid to it. Regular performance appraisal, at least, is a good start. Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee's work performance, the presence or absence of work skills can become very obvious - even to those who habitually reject the idea of training for them! Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years?

Employee Evaluation :
Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal. But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual. Though organizations have a clear right - some would say a duty - to conduct such evaluations of performance, many still recoil from the idea. To them, the explicit process of judgment can be dehumanizing and demoralizing and a source of anxiety and distress to employees.

APPRAISAL PROCESS :

Many organizations make every effort to approximate the ideal process, resulting in First- rate appraisal systems. Second- compensation & broadbanding method. Total Quality Management- To Energize and motivate the employees, Mac Donald can Organised a Total Quality Management Programme.

OBJECTIVES OF PERFORMANCE APPRAISAL

1. To effect promotions based on competence and performance. 2. To confirm the services of probationary employees upon their completing the probationary period satisfactorily. 3. To assess the training and development needs of employees. 4. To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been fixed. 5. To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. 6. To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the rate. 7. Finally, performance appraisal can be used to determine whether HR programs such as selection, training, and transfers have been effective or not.

BACKGROUND & SIGNIFICANCE In 1955, Ray Kroc, a 52-year old salesman of milkshake mixing machines, became interested in a string of seven restaurants owned by Richard and Maurice McDonald. These two founded the quick service restaurant industry when they converted their barbecue drive in with car hops into the worlds first McDonands limited menu, self service drive-in in 1958, in California. Kroc liked their fast-food restaurant concept and bought the Chain for $2.7 million. James Alan Skinner (born 1944 in Illinois) is an American business executive. He is the President and CEO of McDonald's Corporation. Skinner began his career with McDonald's in 1971 as a restaurant manager trainee in Carpentersville, Illinois. He opened his first McDonalds in Illinois in April 1955 and founded the company that evolved into McDonalds corporation. He decided to expand the chain by selling Franchises, and the number of restaurants grew rapidly.

Mc DONALD s India: McDonalds India is a locally owned company managed by Indians. In Mumbai Amit Jatias company, Hard castle restaurants Pvt. Ltd., owns and manages McDonalds restaurants. In Delhi, McDonalds restaurants are owned and managed by Vikram Bakshis Connaught Plaza restaurants Pvt. Ltd. Both these individuals are responsible for the running of McDonalds India.

SIGNIFICANCE OF PERFORMANCE APPRAISAL: PERSONAL ATTENTION: During a performance appraisal review, a supervisor and an employee discuss the employee's strengths and weaknesses. This gives the employee individual face time with the supervisor and a chance to address personal concerns.

FEEDBACK: Employees need to know when their job duties are being fulfilled and when there are issues with their work performance. Managers should schedule this communication on a regular basis. CAREER PATH: Performance appraisals allow employees and supervisors to discuss goals that must be met to advance within the company. This can include identifying skills that must be acquired, areas in which one must improve, and educational courses that must be completed. EMPLOYEE ACCOUNTABILITY: When employees know there will be regularly scheduled evaluations, they realize that they are accountable for their job performance. COMMUNICATE DIVISIONAL & COMPANY GOALS: Besides communicating employees' individual goals, employee appraisals provide theopportunity for managers to explain organizational goals and the ways in which employees can participate in the achievement of the goal. REVIEW OF LITERATURE Supply chain management, analysis, and improvement for McDonalds is becoming important of which sector the company belongs as the measuring of supply chain depends on the supply chain logistics management at McDonalds as well as the

measuring of supply chain process affecting McDonalds real world applicability. The customer responsiveness measures include lead time, stock out probability as well as the fill rate as corresponding to the operational performance measures used by McDonald as appropriate for supply chain analysis, the measuring of customer satisfaction (, 1994) with ample base pointing to supply chain performance measures ( and , 1995). The customer relations manager at McDonalds is responsible for collecting the customer satisfaction information from the fast food, restaurant areas in order to access guest satisfaction information and take appropriate operational performance measures as well as impeding positive action for satisfaction performance. As (1992, ), argue that setting standards for performance measures may impose conflicts with continuous improvement at McDonalds as he noted that, if standards were not carefully set, they had the effect of setting norms rather than motivating satisfaction improvement . McDonalds operational performance management are required to strike in strong balance between providing an overall customer satisfaction experience and operating in to several restaurant product and services and McDonalds will achieved the success in satisfaction measure through continuous observation and real time supply chain measures by McDonald heads.

Methods Qualitative determination of performance indicators apply in this research, noting in organizational hierarchy as well as area of successful application and focus on the kind of decision the indicator is meant to support. Recognizing in surveys allowing modifying McDonalds performance system as whole, for McDonalds board of management responsible for operations and supply chain functioning. There are types of units in which there quantities can be expressed. There are indicators that express performance in terms of monetary units in production and inventory management. The case study method for analysis in developing coherent performance management system that are used by McDonalds on operative base Data will be collected and analyzed through using qualitative techniques such as document analysis, interviews and questionnaire survey of a total of 40 McDonalds head/staffs that adheres to business success and performance indicators linking to supply chain and customer satisfaction.

RESULT
1. What is performance appraisals?

Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order.

Performance evaluation in McDonalds: The performance evaluation criteria involve employee traits such as honesty and dependability, while the performance evaluation criteria involve that employee behaviors such as punctuality and timely completion of tasks, etc as well as objectively quantifiable results and outcomes such as productivity or sales figures, etc in very great extent . Managers, supervisors and Non-managerial employees in this organization receive a formal performance appraisal regularly (at least once a year) and in great extent, the results of performance appraisal used to provide feedback and improve their performance.

2. Should performance appraisal be used for development or for management decisions such as raises and promotion also? It is a process by which the performance of an employee is evaluated.M c D o n a l d s c o n d u c t s p e r f o r m a n c e r e v i e w s e m i - a n n u a l l y . S o m e standards are made and defined according to which the employees haveto perform. Then after 6 months all the employees are evaluated thatw h e t h e r t h e y c o m e u p t o o u r s t a n d a r d s or not. An OJE (on- jobevaluation) is performed in order to evaluate the employees. I f a n employee does not perform well then feedback is provided to them sothey can improve.T h e a p p r a i s a l p r o c e s s i n M c D o n a l d s i n c l u d e s P A f o r m s f o r e v e r y particular job which involves: International McDonalds standards. Assessing the employees actual performance relative to thesestandards.Providing feedback to the employees.

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3 What are the advantages and disadvantages of performance appraisal?.

BENEFITS OF PERFORMANCE APPRAISAL

1. Performance based conversations

Managers get busy with day-to-day responsibilities and often neglect the necessary interactions with staff that provide the opportunity to coach and offer performance feedback. A performance management process forces managers to discuss performance issues. It is this consistent coaching that affects changed behaviors.

2. Targeted Staff Development

If done well, a good performance management system can be a positive way to identify developmental opportunities and can be an important part of a succession planning process.

3. Encouragement to staff
Performance Appraisals should be a celebration of all the wonderful things an employee does over the course of a year and should be an encouragement to staff. There should be no surprises if issues are addressed as they arise and not held until the annual review.

4. Rewards staff for a job well done

If pay increases and/or bonuses are tied to the PA, process staff can see a direct correlation between performance and financial rewards.

5. Underperformers identified and eliminated

As hard as we try, it is inevitable that some employees just wont cut the mustard as they say. An effective PA process can help identify and document underperformers, allowing for a smooth transition if the relationship needs to be terminated.

6. Documented history of employee performance

It is very important that all organizations keep a performance record on all employees. This is a document that should be kept in the employees HR file.

7. Allows for employee growth

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Motivated employees value structure, development and a plan for growth. An effective performance management system can help an employee reach their full potential and this is positive for both the employee and manager. A good manager takes pride in watching an employee grow and develop professionally.

DISADVANTAGES:1. Time Consuming It is recommended that a manager spend about an hour per employee writing performance appraisals and depending on the number of people. 2. Discouragement If the process is not a pleasant experience, it has the potential to discourage staff. The process needs to be one of encouragement, positive reinforcement and a celebration of a years worth of accomplishments.

3. Inconsistent Message
If a manager does not keep notes and accurate records of employee behavior, they may not be successful in sending a consistent message to the employee.

4. Biases
It is difficult to keep biases out of the PA process and it takes a very structured, objective process and a mature manager to remain unbiased through the process.

CONCLUSIONS AND RECOMMENDATIONS CONCLUSIONS/IMPLICATIONS PARAMETERS OF PERFORMANCE APPRAISAL The performance appraisal is based on the following some of the parameters: Ethics General Knowledge/ IQ, Confidence Motivation Team Work Communication Skill At McDonalds every employee is on a race to give the best performance through their knowledge, abilities andskills. An appraisal session is also arranged for the employees. An appraisal interview in McDonalds is taken by Head of the Department only and the progress report of the employee is also in the hands of the Head of theDepartment. In McDonalds the yearly appraisals of employees are done in June to July. PERFORMANCE APPRAISAL METHOD McDonalds uses the Graphic Rating Scale Method for evaluating the performance appraisal of employees. GRAPHIC RATING SCALE METHOD: Through the Graphic Rating Scale the head of the department rate the person according to the performance of its work, skill, knowledge, experience and after the assessment according to the rating scale, rate the employee as appraised. Graphic rating scale method involves the following traits: Communication Personal effectiveness/efficiency Teamwork Productivity Quality of work Reliability In McDonalds employees are rated according to these or more traits. Rated on his/her performance that theemployee is good in communication skills or not, the employee could work independently on its own. Theemployee is cooperative with other his/her co-workers. The productivity of work that weather he/she couldwork more and proper in less time and finally is the employee is reliable means he/she will work on timeappropriately. Well the graphic rating scale method which McDonalds use is a best and simplest method for thembecause employees
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from floor base to managerial level are rated easily. The scale lists the suitable traits or standards for the employees according to their work or job and they are rated fairly as according to their performance. COMPENSATION AND BENEFITS PROGRAMS COMPENSATION METHOD: McDonald uses Broad banding trend of compensation, in this trend wide range of jobs and salary levelsarerepresented by Bands So the employee, whose job falls on one of these grades, gives the pay range listed onthat grade and determines his or her salary. McDonalds has this system of compensation because, broad banding allows for flexibility in terms of pay, growth and movement. WHY THEY USING BROADBANDING METHOD McDonalds is using broad banding method for compensation because it is the most used method by companiesand it is relatively easy to handle. As there are so many jobs and each job has its own description and value so by making bands of similar jobs and assigning them the appropriate salaries will make easy for McDonalds toset the pays of employees. COMPETENCY-BASED PAY McDonalds dont apply the Competency-Based Pay Method because in this method pays are established asaccording to the performance of employee such as: If a crew member is working according to the level of manager his performance is equivalent to manger so their pays will be same. But McDonalds pay their employees according to the job or level. Mangers own different higher pays as compared to worker or Crewmembers. ESTABLISHMENT OF PAY RATES Why pay rates are established???? It is very difficult to set pay for any organization without conducting pay rates. Pay rates are necessary to define because it is better for both employer and employee. FOR EMPLOYER : He sets salaries according to the market or could be more from market and employer getknowledge about market. FOR EMPLOYEE : Similar nature of jobs categorized in groups and employee feel secure that he is gettingsalary according to market rate or could be more. PAY RATES IN MCDONALDS McDonalds follow following steps in establishing of pay rates A. MCDONALDS SALARY SURVEY: McDonalds conduct salary survey, that what other employers are paying for the same nature of job to thereemployees. McDonalds pays more to their employees as compare to market. So, the salary survey is necessaryfor establishing pay rates. McDonalds has also given its salary ranges on different jobs in their site.
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LOWER LEVEL JOBS : For the lower level jobs like Crew Members or clerical workers McDonalds conducta salary survey through Telephone or Internet. HIGHER LEVEL JOBS : Whereas, for the higher level jobs such as at managerial level a formal survey isconducted by McDonalds. In McDonalds the employer collects the information from other employers in a formof questioners, in which he asks about the overtime policies or bonuses, the starting salaries or other increments. B. JOB EVALUATION : The second step in establishing pay rates is evaluating jobs or JOB EVALUATION In Job Evaluation jobs are evaluated or compared with each other on the basis of qualifications, skills,responsibilities and working conditions. McDonalds follows the Job Classification method of job Evaluation because they have categorized their jobs into two main classes known as: Part Time Employees Full Time Employees McDonalds evaluate its job on the basis of working hours of their employees more clearly for the crewmembers they use the part time job evaluation and for managerial level staff they use full time evaluation PART TIME EMPLOYEES: Well for part time employees MacDonalds pay them on the basis of their working hours means hourly wages. FULL TIME EMPLOYEES: The Full Time Working Employees are given salary on monthly basis they are known as permanent employees. C. GRO UP SIMILAR JOBS INTO PAY GRADES After job evaluation, McDonalds grouped similar nature of jobs into pay grades for establishing pay rates. AsMcDonalds uses the job classification technique so their jobs are already in a grouped form and they establish pay grades according to part time and full time jobs. D.PRICING OF PAY GRADES This step assigns pay rates to pay grades. For assigning pay rates to any level of job, McDonalds uses

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RECOMMENDATIONS

For the purpose and growth of Mc Donald fast food restaurant & Employees satisfaction certain recommendation are significant. We to achieve an apex position few vital suggestions for higher level of employees satisfaction , are as follows:-

McDONALD'S

l. MOTIVATION AND SATISFACTION . Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all.

2. Training and Development Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee's work performance, the presence or absence of work skills can become very obvious - even to those who habitually reject the idea of training for them!

3. Recruitment and Induction Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. For example, how well are the employees performing who were hired in the past two years? Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining.

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4. Employee Evaluation Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is the process of examining and evaluating the performance of an individual.

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REFERENCES
http://mcdonaldsmis.blogspot.com/p/hrms.html http://www.mcdonalds.com/content/us/en/search/search_results.html?search=simple&queryT ext=performance+appraisal+of+employee&collection=us http://www.scribd.com/doc/25541086/Mcdonald-Hr-Project

http://ivythesis.typepad.com/term_paper_topics/2009/07/impact-of-performancemanagement-on-organizational-success.html

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