Performance Appraisal Policy

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Performance Appraisal policy
Performance appraisal is a term used to describe a process for documenting and communicating
an employees performance. Although many managers and employees denote performance
appraisals as they early report card, it is significant for both to understand the role these
appraisals play in documenting performance issues and upholding the companys performance
management philosophy.
At Toyota,

We believe our employees are the key to our business success.
We endeavor to recruit, develop and retain the best employees.
In order to continue being a leader in our industry, we inspire, support and reward employees
based on our philosophy of recognizing and rewarding exceptional performance.
We believe that performance management is an ongoing and daily process and not just an annual
event. We require managers and employees to conduct a formal annual performance review,
documenting and emphasizing the previous years accomplishments through the use of the
company performance appraisal process.
Annually, individual employee performance goals are developed within put from employees,
customers, peers, supervisors and our Board of Directors. This is a collaborative process that lasts
from January to March each year.
On a monthly basis, supervisors are responsible for updating employees on the status of our
business goals and their individual performance goals.
Measures of these performance goals for the previous year are reviewed with employees starting
the week of March, the beginning of our business year. They must be concluded before the end of
March.
Supervisors and employees may seek assistance from HR regarding performance, conduct or
attendance issues. Training, performance improvement plans or disciplinary action may result
from information obtained during the performance review process.
The annual performance appraisal forms are designed to evaluate performance against goals and
expectations using a rating scale from one (1) to five (5).
A rating of 1 indicates Unacceptable performance; a rating of 5 indicates performance is
Outstanding. The form also has room for comments.

Employees who have unacceptable performance at the semi-yearly review will receive a
performance improvement plan outlining appropriate training, coaching or disciplinary action.
Our companys performance management philosophy emphasizes the important role employees
play in identifying and setting company and individual performance goals and standards.
Employees are asked to evaluate their individual performance and contributions to our companys
goals.
The company believes in employee participation when setting performance goals and standards.

Communication about company and individual performance is an ongoing process nevertheless,
once a year the company sets aside time to formalize this communication through its performance
appraisal program. The annual performance appraisal provides an opportunity to officially
review, document and identify the previous years accomplishments and each employees
performance.
Our company links annual pay increases to individual contributions toward the success of our
business. To be considered for a pay increase, employees must obtain an overall rating of 3 ,4 or
5 on their annual performance appraisals. By March 31 of the following (next) year, supervisors
will complete the annual performance appraisals for the previous year. Employees will see pay
increases reflected in their paychecks in April.
PURPOSE

This policy outlines the performance appraisal program to be used for all employees.

OBJECTIVE

To provide an objective and quantifiable measure of an employee's performance so that an
individual can be evaluated based on his or her performance and contribution to the Company.
To establish a formal procedure and framework for an annual discussion of performance between
each employee and their supervisor.
To assess and determine the developmental needs of the employee and assist in formulating and
action plan to address those needs.
To recognize promotable individuals and decide how their abilities may best be employed by the
Company
POLICY

Formal performance appraisals must be completed and reviewed with all salaried employees
atleast annually. Normally, this review will occur twelve months after the hire date, the date of the
last performance review, or the date of a promotion.
A completed Performance Appraisal must accompany all requests former it increases and
promotions. The Appraisal Letter should be completed and reviewed with the employee even
when no increase is granted.
The Performance Appraisal should evaluate an individual's performance over the last period
recognizing performance to established goals, substantial accomplishments, and strengths as well
as deficiencies and opportunities for improvement. In addition, an appraisal should set goals and
objectives for the next period
A supervisor should take the subsequent steps in evaluating an employee's performance:

Establish your performance expectations.
What are the critical tasks, accountabilities, and key results required for this position?
To be effective, standards should be realistic, understood, achievable and communicated in
advance of the appraisal or by means of the previous appraisal.
Observe the employee's job performance

Compare performance expectations with results. A potential distortion is the halo or horn effect in
which a supervisor is aware of some prominent or recent example of good
Or bad performance and assumes all aspects of the job holder's performance to be equally good or
bad. The focus needs to beon the entire period
Develop with the employee a plan to improve performance as well as foster the employee's own
growth.
Use the progress or development interview to motivate the employee. These discussions create the
basis of the annual performance review, objectives and goals
Performance appraisals are really ongoing. A good supervisor regularly provides both positive
and negative performance feedback to their subordinates. This feedback should address the results
of good and/ or poor performance behavior. Catch employees doing good and shape behavior
through rewarding (recognizing) these examples of desired behavior
A performance appraisal documents an employee's level of performance and must be returned to
the Human Resources Department for inclusion in the employee's permanent file after the
performance appraisal interview. A copy of the appraisal should be given to the employee
RESPONSIBILITIES

Each supervisor is to review their employees on at least an annual basis following the guidelines
of this policy.
Each area manager is responsible for ensuring that performance appraisals and increases happen
in a timely manner.
Human Resources have the responsibility to maintain these programs and aid in the analysis of
policy. This includes inspecting the performance appraisal program to ascertain compliance with
the guidelines of this policy.


Performance measurement method used
Multi-source assessment (MSA)
Multi-source assessment is known by a variety of names, comprising 360-degree feedback, multi
-rater assessment. MSA elicits precise, unbiased, constructive feedback from a variety of well-
informed sources; with the goal of more precisely assessing how an employee is doing.
MSA primarily relies on information gathered from written forms that contain a series of
statements or questions to which raters respond. The raters can take account of the appraised
employee's subordinates, peers, and supervisors, internal and external customers. Self-appraisal
also is a common part of MSAs.
MSA can be used with self-directed, team-based work groups or with traditionally hierarchical
relationships. MSA is an integral part of management and leadership development programs
Implementation Guidelines

Effective implementation of MSA involves creating a questionnaire, creating a response scale,
selecting and training raters, distributing MSA forms, and providing feedback to the individual
appraised once all MSA ratings are analyzed.
Developing a questionnaire.

The first step in designing an MSA rating form is to identify the behaviors and represent the
employer values and wants t o quantity. Next, the employer should create questions related to the
behaviors and outcomes to include in the rating questionnaire. Questions should focus on
behaviors that are observable and can be changed, not on personality traits.
Employers also need to consider how many questions to include, predominantly if raters will have
a large number of employees to evaluate using the questionnaire. Raters should be able to finish a
questionnaire in no more than 15 or20 minutes.
Establishing a rating scale.

Employers need to create a response scale that provides quantifiable , standardized responses to
questions. Most questionnaires use either as at is or Likert scale with responses ranging from
very satisfied to very dissatisfied, or an agreement scale with reactions ranging from
strongly agree to strongly disagree. Frequency scales, which elicit responses ranging from
always to never, are not considered as useful. Whatsoever scale is used, raters should have
the option of indicating not applicable or don't know when applicable. Six choices generally
are considered adequate to eliminate vagueness, precisely capture raters' opinions ,and measure in
direct behavioral changes overtime. Some questionnaires include an open-ended sections or raters
can provide written comments to support, clarify, or qualifytheirratings.
Selectingraters

The employer should identify the individuals will complete rating forms and one or more
reviewers who will analyze and compile ratings into a feedback report. To provide a complete and
precise assessment, persons selected as raters should have worked directly with the ratee. Raters,
especially those participating in the process for the first time, should go through training that
covers these key points:
Assurance ofanonymity

The MSA process must protect raters identities to guard against inflated rankings and ensure
truthful, honest feedback. Without confidentiality assurances, raters might fear that honest
responses will damage relationships with co-workers or result in repercussions by managers.
While raters remain anonymous to the person undergoing appraisal, they dont have total
anonymitythe person(s) responsible for reviewing and compiling MSA forms must be able to
Contact raters about indecipherable responses, likely bias in scoring, and other concerns that
might require clarification.
Rater accountability

To ensure the legitimacy of feedback, evaluators should know that the MSA process includes a
review of all response forms to detect anomalous ratings. Raters should understand that they
likely will be asked by HR or the person in charge of compiling MSA forms to explain ratings
that are consistently at the top or bottom of the scale or significantly different from other
respondents' scores.
Fairness safeguards

The MSA process should incorporate scoring and review procedures that eliminate clearly void
responses, guard against conspiracy among respondents, and detect systemic biases against a
particular employee or all employees in a protected-status group. Raters should understand that
the anonymity safeguard does not give them license to act on personal grudges or biases thathave
little to do with work.
Instructions on the MSAprocess

Raters should receive an overview of the MSA process and its purposes, along within formation
on how ratings will be collected and used. The training should instruct raters on how to complete
the questionnaire, code their responses, evade common errors, and submit completed forms.
Distributing MSA forms. Questionnaires should be coded with each ratee's name or employee
number and the rating source, for instance ,peer or direct report. All forms should be
accompanied by a labeled, return envelope and instructions that clearly specify the deadline for
completion.
Providing feedback

Once all forms have been collected, the data must be examined and accumulated into reports for
the person appraised. Reports preferably should reflect the views of three to five raters and
present information in a format corresponding to the appraisal categories and questions.When
summarizing written responses to open-ended questions,employers should take care not to
misinterpret crucial information or create the impression that information has been censored.
The reports should be presented to the rate in a timely fashion. Follow-up, in the form of coaching
and counseling, is essential to ensure that the MSA process continues to produce meaningful
linformation for personnel decisions.
Peer Review

The peer review method rests on the concept that individuals who perform similar work are in the
best position to judge an employee's performance. Peers realize the nature of the job; are familiar
with the worker's activities; share common concerns; and are relatively unencumbered by issues
of power, dominance, and control. Peer review often is used by employers that support self-
directed work teams, but it can be adapted to almost anywork setting.
One advantage of peer appraisal is that it can generate regular, reliable, and valid feedback from a
consistent number of sources. Some professionals also have found that peer ratings tend to focus
on results achieved rather than effort devoted ,thereby serving as strong forecasters of future job
performance.
Employers often are reluctant to adopt peer review, dreading that employees will be too kind in
their evaluations or overrate their friends while downgrading co-workers they dislike. However,
experts discount this concern, indicating out that all ratings, whatsoever the source, are inspired to
some extent by the evaluator's feelings about the person assessed.
Otherconcerns to address whenexecutingpeer reviewinclude:

Managing the administrative aspectsfor example, distributing large numbers of forms,
collecting and analyzing data, and taking time to share results with ratees;
Overcoming employee confrontation to being judged by co-workers who might have less
experience or time on the job; and
Easing supervisors worries that employees direct participation will undermine their authority

Implementation Guidelines

To minimize potential problems with peer appraisals, following should be taken care of:

Specify a lowest and highest number of evaluation forms to distribute for each ratee;

Consider having supervisors elect raters and distribute forms to ensure anonymity;

Encourage each employee when employees, not supervisors, pick raters to select peers who have
the most knowledge about the employee's job, aptitudes and skills
Require another party, such as a higher-level supervisor or an HR representative, to review each
ratee's distribution list;
Allow raters to opt out of the assessment process once they have received a certain number of
forms to complete;
Insist on concealment and discipline employees who share and compare ratings;
Make it clear to staffs that peer ratings are only one source of feedback used to assess
performance;
Occasionally review evaluation forms to make sure performance criteria are objective and current;
and
Train supervisors and employees about objective observation techniques, the purpose and uses of
peer review, how peer review relates to individual performance goals and company objectives,
and how to complete evaluation forms without makingcommon ratingerrors




Ratings (Maximum)

Self-5(Fortotalratingscalculation,thiswillbegiven50%weightagetoremovethebiasofratingthe self
high-So it will bea maximumof 2.5)
Supervisor-5(Fortotalratingscalculation,thiswillbeincreasedto150%weightage-Soitwill
beamaximum of 7.5)
Customer-5
Subordinate-5
Peer-5

Total-25
Wherever the customer is not applicable, the total score will be 20.
In each parameter, the percentage will be computed and for all the 9 parameters, average of the
percentages will be calculated(X)


For attendance and discipline, the score will be calculated based on the following table (Y)
Percentage Score
80-100 1
60-80 2
40-60 3
20-40 4
0-20 5

For development , a score of 15 will be given (Z)












OVERALL RATING (FOR CORE STAFF)

=80% of X + Y +Z

OVERALL RATING (FOR SUPPORT STAFF)

= 95% of X + Y

For score from 80-100 considered for promotion +20%hike (GRADE A)
70-80- 15%hike (GRADE B)
60-70- 10%hike (GRADE C)
Below 60-TrainingandNeedsimprovement




Basedonthescoreforalltheemployeesinallthedepartments,theemployeeswhogetthehighest scorein
thecompanywill get thefollowingawards
Employee of theyear
Manager of theyear









CORE
STAFF
APPRAISAL
FORM













SUPPORT
STAFF
APPRAISAL
FORM