SOLUTION TO ASSIGNMENT

NAME
ROLL NO
SUBJECT

REENA KHAN
1405002539
PERFORMANCE MANAGEMENT AND
APPRAISAL (MU0016)

Question 1. Discuss the principles and dimensions of Performance Management.

Answer.
1.

Principles Of Performance Management (PM):(a)

Integration of Individuals and Organizational Objectives.
The
organizations and the individual goals should be aligned and integrated. However, it
does not necessarily mean that an individuals demands have to be met always.
(b)
Specificity. PM goals should not be discussed in the passing as it can lead
to confusion. They have to be specific to the situation and the cycle of the
performance management rather than based on some old events or the actions of an
employee in another performance management cycle.
(c)
Measurability. To ensure integration PM should be clearly measurable as
agreed between the parties in question. This often fails because it becomes
susceptible to interpretation.
(d)
Mutual Agreement. PM is dependent on a mutual agreement and therefore
the goals; feedback and so on must be based on mutual agreement than thrust upon
the other party.
(e)
Continuity. PM is not a fixed event and it is a cyclic process concentrated on
learning and development.
(f)
Customization. Performance management is a dynamic system and is a
natural process of managing people. It is a way an organization views its employees.
(g)
Flow. Principles of flow demand that PM is a process rather than a system.
There has to be a logical sequencing so that the event unfolds like a story.

2.

Dimensions of PM.
(a)
Output Dimension. Results and outputs are the most accepted, visible and
measurable dimension of performance. It describes the standard to be achieved in
an easily measurable form. These give the status and summary of the finished and
semi-finished products and services and describe the results in terms of the
measurable standard, for example, achieving 95 per cent of the standard output in a
shop floor engaged in production of plastic moulded rifle butts. Some examples of
results and outputs are the number of new customers, cost savings, production
targets, sales targets, job accomplishments, meeting deadlines, etc.
(b)
Input Dimension. The input dimension consists of tasks and activities
accomplished by the individual. Broadly this is concerned with the nature of activities
to be undertaken, the time frame, the quality of inputs to be used, etc. Input
dimensions of performance can be better managed when the envisaged inputs are
correctly used, properly planned and implemented. The nature of activities to be
undertaken by the individual, the time frame, the quality of inputs, etc.
(c)
Time Dimension. This dimension of performance is defined in terms of time
specific tasks, that is, tasks to be performed daily, weekly, monthly, yearly, etc. Here

the time factor is important, as achieving the desired performance level within
specified time frame is considered to be the target. Performance can be measured
for task, for a day, for a week, for a month, for a year or for life.
(d)
Focus Dimension. Focus dimension of performance is measured in terms of
the performance focus, which could vary from employee to employee depending on
the nature of job responsibilities. For example, an HR executive's performance focus
may be defined in terms of reducing the rate of attrition, cost-effective design of
compensation, developing employees competence, etc. Similarly, for a marketing
executive, this could be new market development, increasing the sales realization,
etc. Thus depending on the nature of job, performance focus may vary
(e)
Quality Dimension. The outcome of performance should be a good quality.
Fundamental characteristics are Customer orientation and Prevention approach to
errors. The goal being improving customer satisfaction.
(f)
Cost Dimension. Cost is another dimension of performance. Costs may be
financial, or with respect to time and effort. There is a need to introduce econometric
methods to measure cost effectiveness, and relate cost effectiveness to variables of
performance management practices.

Question 2. What are the key contents of a Performance Agreement? Explain.

Answer.
1.
Key contents of a Performance Agreement. Performance agreement defines the
following aspects of performance expectations:
(a)
Role Requirements.
Key Result Areas (KRAs) are defined towards the
achievement of the role of a job. An employee who is the role holder is expected to
accomplish these KRAs and necessitate competencies to be achieved. The
performance agreement will define the role, KRAs of the role, the competencies,
behaviour expected and training required, if any, for the same.
(b)
Objectives and Standards of Performance. Objectives define what
organizations, functions, departments and individuals are expected to achieve over a
period of time, in a performance management cycle. It can be either quantitative or
qualitative; and work related, referring to the achievement of role requirements. They
could also be personal, taking the form of developmental, which are concerned with
what individuals should do to enhance their knowledge skills and potential, and to
improve their performance or change their behaviour in specialized area.
(c)
Knowledge, Skills and Capabilities. These are definitions of skills and
competencies that each role holder has to know to be able to perform well and to
know how they are expected to behave in particular aspects of their role.
(d)
Performance Measures and Indicators. It contains the description of
measures jointly agreed upon by the manager and the employees to assess the
extent to which objectives and standards of performance have been achieved.
Performance is usually measured using a rating scale, the format of which can either
be behavioural with examples of good, average and inadequate performance.
(e)
Corporate Core Values or Requirements. It may also refer to the core
values of the organization for quality, customer service, team work, employee
development and so on, that employees are expected to maintain while carrying out
their work. Some general operational requirements in areas such as health and
safety, budgetary control, cost reduction and security may also be specified

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.
1.
Purpose of Performance Appraisal. It is a method of evaluating the job
performance of an employee and is an ongoing process of obtaining, researching,
analysing and recording information about the worth of an employee. The main purpose of
performance appraisals is to measure and improve the performance of employees and
increase their future potential and value to the company. Other objectives include providing
feedback, improving communication, understanding training needs, clarifying roles and
responsibilities and determining how to allocate rewards. The organizational purposes are:(a)
It identifies whether an individual is actually contributing to the job and then to
the organizational effectiveness. Through appraisal 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.
(b)
It helps in giving feedback of the performance, which, in turn, helps in
performance improvement.
(c)
It indicate training gap and needs so that an employee can meet the
organisational goals.
(d)
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.
(e)
It acts as a control measure and helps in evaluating the efficacy of the job and
identifies whether the incumbent requires more competency or resources to execute
it effectively.
(f)
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.
(g)

It reduces grievances because it is systematically comparable.

(h)
It 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.
(i)

It is important for succession planning.

(j)
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.
(k)
It facilitates meeting several statutory requirements and often acts as an
important input in HR-related legal cases.
(l)
It makes a major difference to the self-worth of the individual, his feeling of
self-efficacy and self-confidence.
2.

Performance Appraisal Process.

(a)
Employee fills the self-appraisal form and submits to the manager. The
individual records his performance as evaluated by him in relation to each objective
and KRA. The evaluation could be figurative.
(b)
Manager Concurs or Differs with the Self-appraisal. The manager may
concur or differ with the submitted self-appraisal. In case there is a difference the
same has to be substantiated with reasons. In the case of an agreement, he may
agree with the incidents that the employee has cited and may add to them.

(c)
Manager sets up a Meeting with the Employee: This is done on one-on-one
basis and, perhaps, will take 45minutes to 1hour. The manager should prepare in
advance about the feedback he has to give.
(d)
Dialogue and Joint Evaluation of the Performance. It should be carried
out speedily and comfortably. Difficulty could arise when the employee may have
supported the manager in other ways but may have failed in actual performance
objective.
(e)
The Manager fills up the Final Report of the Achievements/shortfalls and
gives it to the Employee. The final report is linked to reward, promotions and
development and the manager has to be objective.
(f)
Employee Concurs or gives a Rebuttal. The process should provide an
opportunity to the employee to rebut the decision of the manager so as to meet the
ends of justice. This should be recorded and signed by both.
(g)
Rebuttal is Recorded and Responded by the Manager: The employee
reserves the right to represent his case to higher management and the manager
should, therefore, be sure of the reason, due justification and conviction of the
grading he has awarded.
(h)
The DOCUMENTS are sent to HR for Record: The documents are
processed to HR for post-appraisal action.

Question 4. Discuss the skills that a line manager require for effective Performance
Management.
Answer
1.
Skills the line managers require for effective PM. The line managers require the
following skills for effective PM:(a)
HR managers by training have to be experts in preparing role profiles,
defining key result areas and competency requirements. In so far as role
profiling is concerned, the line managers should not only be trained to prepare the
role profile but also be engaged fully in the process to ensure that the roles are
executed as per their requirement if, and only if, they manage performance.
(b)
Defining Goals. Once the goals received from the top management they are
and distributed to the departments and teams. HR mangers with their experience
and support with dialogue make them define the goals for themselves. This will
ensure that the line manger provides support to accomplish the goals.
(c)
Identifying and using Performance Measures. Line managers must have
the tacit knowledge of this aspect so that performance measures can be made in a
way the employee and the manager understands it. This will make an employee
deliver.
(d)
Giving and Receiving Feedback. A line manager must not shy away from
giving feedback and feel 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. Feedback also involves some expertise in managing
emotions and hence the need for the line managers to be trained in doing so.
(e)
Taking Part in the Performance Dialogue. The line manger must be adept
in a performance dialogue as it enables his ability to control production, which is
undoubtedly his focus.
(f)
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 and must be able to define the learning gap as also
arrange for such training so as to ensure rise in productivity.
(g)
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.
(h)
Coaching. A line manager should be able to act as a coach and mentor to the
employee and ensure of the day-to-day proximity and interpersonal relationship.

Question 5. Define the term Ethics. Discuss the key factors involved in ensuring
Ethics in Performance Management (PM).
Answer
1.
Ethics. The word ethics comes from the Greek word ethikos. It refers to ones
moral character and the way in which society expects people to behave in accordance with
accepted principles. It can be used to describe a particular persons own, idiosyncratic
principles or habits. It is a set of concepts and principles that guide us in determining what
behaviour helps or harms sentient creatures. It is that branch of philosophy dealing with
values relating to human conduct, with respect to the rightness and wrongness of certain
actions and to the goodness and badness of the motives and ends of such actions.
2.

Key Factors to Ensure Ethics in Performance Management

(a)
Define and Describe the Ethical Standards. Ethical standards to handle
the external agencies and for internal actions, particularly PM must be specified in
the PM document indicating what is considered ethical and what is not in the PM
context and the consequences of following these or disobeying them.
(b)
Plan the PM well in Advance. Goals must be given to the employees at least
a month prior to its being effective so that the employee has a head start.
(c)
Take Collective Decision. Group decisions made produce better quality
decisions as this will be inclusive of the diverse interests and perspectives. They
increase creditability of process and in turn benefit the outcome because of the
reduced suspicion of unfair bias.
(d)
Record Critical Incidents Frequently and let the Employee know it.
Decisions of performance are often taken on the basis of critical incidents. While it is
desirable to record it as and when it occurs, one must record it at least once in a
month. Permit an employee to have access to the critical incidents on a continual
basis. This would act as an automatic feedback system in some ways.
(e)

Ethics during Feedback:

(i)

Give objective and focused feedback.

(ii)
Frank feedback and opportunity to improve must be given for future
promotions and increments
(iii)

A frank feedback should be given to all to meet the ends of justice

Question 6 Write short notes on the following:

a)

MBO

b)

Behaviourally Anchored Rating Scales Method (BARS)

Answer
1.
Management by Objectives (MBO). This method involves setting particular
calculable goals with each employee and then respectively discussing his/her progress
towards these goals. The term MBO refers to an inclusive organization-wide goal setting
and appraisal programme that consist of six main steps:
(a)
Set the Organizations Goals. Create organization-wide plan for the next
year and set goals.
(b)
Set Departmental Goals. Here, the heads of each department set goals for
their respective department in consultation with their superiors.
(c)
Discuss and Allocate Department Goals. Organizations goals are
discussed by heads of departments with all subordinates and ask them to develop
their own individual goals. In other words, how an employee can contribute to his/her
department in achieving its goals.
(d)
Define Accepted Results. Heads of department and their subordinates set
short-term performance targets.
(e)
Review the Performance and Evaluate the Results. Heads of department
compare actual performance for each employee with expected results.
(f)
Provide Feedback. Head of department hold periodic performance review
meetings with subordinates to discuss and evaluate the progress level in achieving
the expected results.
2.
Behaviourally Anchored Rating Scales Method (BARS). The BARS is a
comparatively new technique. It comprises behavioural statements describing fair and
unfair performance with respect to important qualities. These attributes may refer to interpersonal behaviour, planning and organizing capabilities, flexibility and reliability. These are
developed from critical incidents collected both from evaluator and appraisee. BARS are
normally presented vertically with scale points ranging. It is an appraisal method that aims
to combine the benefits of narratives, critical incidents, and quantified ratings by anchoring
a quantified scale. BARS are measuring scales, which point to definite and indefinite
behaviour. The scales represent a band of expressive statements of behaviours, ranging
from the least to most effective. An evaluator must indicate which point on the scale best
describes an employees behaviour. The scale points are specially defined behaviours
which differentiate BARS from other rating scales that are commonly used. Moreover,
BARS are designed by the evaluators who are going to use them. There are few steps in
BARS construction process:
(a)

Listing of all the important aspects of performance for a job.

(b)

Collection of critical incidents of definite and indefinite behaviour.

(c)
Classification of definite and indefinite behaviours to appropriate performance
dimensions.
(d)
Assignment of numerical values to each behaviour within each measurement,
i.e., scaling of behavioural anchors.