Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Q1. The HR department of a software company reviewed the performance of the employees. The HR Manager wants to provide feedback of the performance review to the employees. Describe the factors that have to be looked into while providing performance review feedback. Ans. Performance Appraisal Feedback Models help us to achieve what is known as a meaningful performance feedback. Meaningful performance feedback, as we know, is best achieved through proper communication between the feedback giver and the feedback receiver. Irrespective of who provides the feedback to the receiver, there are certain perceptual barriers that these communications have to travel through. These barriers act as filters and thus affect the actual message that is heard. Different variables of performance feedback have been incorporated into a feedback model. We see that the variable for both the giver and the receiver of feedback is determined by the perceptions of the participants. GIVER P E Biases Security Experience Communications Sensitivity Expectations Values R C E P T I O N S The above chart lists only a few of the endless list of possible variables that these perceptions can create. Reading further will help us to get a clear understanding of how perceptions of different participants affect the feedback. The Said/Heard Meant/Felt Feedback Matrix The Said/Heard Meant/Felt Matrix, should help give more clarity to the concepts introduced in the above chart. Winter Drive November 2011 Sikkim Manipal University 1 Receptivity Growth Commitment Goals Self-Esteem Motivators Values RECEIVER

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Heard

Said

Meant

Felt

The Said/Heard Meant/Felt Matrix can be used in any way or direction. This implies that the matrix can be applied vertically, horizontally, counter clockwise, and clockwise. It can be used either by the giver or the receiver of performance feedback or both. The aim of the matrix can be achieved only when all the participants in the performance feedback process use it. To illustrate how the matrix can be put to work, let us begin by using the matrix in a clockwise direction starting at the 9:00 oclock position. From this point we begin with what is Said. Let us label the four quadrants A, B, C, and D as shown in Figure 10.3. Heard A Said C Felt D B Meant

Now, let us look at how the matrix can used during a typical performance review.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Heard

P A Giver: You could have contributed much more to the project. E R C Said E P T I O N S Meant

Felt In Quadrant A, the feedback giver has said, You could have contributed much more to the project. This is where the challenge arises, wherein the statement must now pass through the perception barrier that has been represented as the vertical axis of the matrix. Let us now look into what has been heard by the receiver.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Heard

P A Giver: You could have contributed much more to the project. E R C Said E P T I O N S Meant B Receiver: I have not done my part well

Felt

After passing through the receivers perceptual barrier, you can see in Quadrant B that what was heard was I have not done my part well. Now, we must understand that this may or may not have been what the feedback giver would have actually meant. Quadrant C, the giver now clarifies to the receiver the intended meaning of his message shown in the Quadrant A statement.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Heard

P A Giver: You could have contributed much more to the project. E R C Said E P T C I O N S Giver: You have performed well, but there is lot more you can do, given your potential Meant B Receiver: I have not done my part well

Felt In Quadrant C, it is observed that the feedback givers meaning was very different when compared to what was perceived by the receiver. Now the receivers feeling towards this feedback has been illustrated in Quadrant D in Figure 10.7.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Heard

P A Giver: You could have contributed much more to the project. E R C Said E P T D Receiver: If I work hard, I can grow well in the company I O N S C Giver: You have performed well, but there is lot more you can do, given your potential Meant B Receiver: I have not done my part well

Felt Utilising the matrix, We observe that there is a dramatic contrast between what the receiver perceived the performance feedback message to be in Quadrant B versus what the message actually meant in Quadrant D. The issue with many performance review sessions is that the communications end at Quadrant B. These misinterpretations can be very counterproductive and will not support the goals and objectives of providing feedback. Hence, by using the matrix, the giver of the feedback can understand how the feedback has been perceived by the receiver and then try to clear the misunderstandings. The matrix can also be used by the receiver to get clarification on points that were not made clear during the performance review. =======================X=======================X========================= Winter Drive November 2011 Sikkim Manipal University 6

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
Q2. Explain the traditional methods of performance appraisal in detail. Ans. From the name itself, one can identify that these are the methods that are most commonly used. The traditional methods of performance appraisal are: o Essay appraisal method

The essay method includes an evaluated report created by the appraiser, which basically includes appraising an employee's performance based on facts and evidences. Besides using the information for decisions on pay rise, promotion or termination of employees, it can also be used for developmental purposes. Since essay appraisals are unstructured and undefined to a great extent, lack of consistency is a major problem. The indefinite, unstructured nature of the essay appraisal makes it highly susceptible to evaluator bias. By not emphasizing on all job-related behaviors or results, an evaluator may simply stress on those that reflect conditionally or unconditionally on an employee. This does not generally represent a clear picture of the employee or the job, which brings down the reliability of the method. o Straight ranking method

Ranking methods compare employees with each other, resulting in an ordering of employees in relation to one another. Rather than in specific judgments about a number of job components, ranking regularly results in general evaluation of employees. Straight ranking demands an evaluator to order a group of employees from best to worst overall, or from best effective to worst effective in terms of a certain condition. The ranking process is carried out in a specific manner (for example, by selecting the best employee in a group first, then the rest, in descending order.) o Paired comparison method

A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. This paired comparison methodology systemizes ranking and enables better comparison among individuals to be rated. Each member of the group is compared with all others in the group one at a time. Once the data based on the overall comparisons for each employee is prepared, the employees are given the final rankings. o Critical incidents method

This method describes how the employee behaved during the critical incidents with respect to performance over a period of time. These are then matched with the employee focusing on actual behavior rather than on qualities. Though this method suits well in performance review interviews, it has a drawback in that the evaluator has to make a note of the critical incidents as and when they occur. That may be an unrealistic task, and may hold-up the feedback to employees. Moreover, it makes little sense to wait for months or a year to solve a misdeed, a fault or get recognized for a good display of idea. Winter Drive November 2011 Sikkim Manipal University 7

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
Field review checklist method

Since every individual differs in quality and attitude, they unintentionally introduce bias in their ratings. To overcome this, essay and graphic rating measures can be combined in an organised review process. In the field review method, 'a representative of the HRM staff meets a chunk of evaluators from the supervisory units to discuss each rating, analytically notifying areas of interevaluator disagreement. It can be a technique to help every evaluator to observe the standards evenly and thus match the other evaluators. Although this method is very time consuming, it is very much reliable. o Graphic ratings scale method

One of the most common methods of performance appraisal, the graphic ratings scale method requires an evaluator to measure on a scale, the angle to which an employee reflects a particular trait, behavior, or performance result. Evaluating forms comprise a number of scales, each relating to a certain job or performance-related measurement, such as job skills, responsibility or quality of work. Each scale is a band of definite points, or anchors, which range from high to low, from good to poor, from most to least effective, and so forth. Scales mainly have five to seven points, although they can have more or less. Graphic rating scales may or may not describe their scale points. o Forced distribution method

Forced distribution is a structure of comparative evaluation in which an evaluator rates subordinates according to specified directions. In contrast to ranking methods, forced distribution is frequently applied to several, rather than only one component of job performance. 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.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1

Q3. What are the major errors that may occur during performance evaluation? Ans. Following are disadvantages of performance appraisal: Spending more time on performance appraisal than performance planning or ongoing performance communication. Performance appraisal is the end of a process that goes on all the time - a process that is based on good communication between manager and employee. So, more time should be spent preventing performance problems than evaluating at the end of the year. When managers do good things during the year, the appraisal is easy to do and comfortable, because there wont be any surprises. Comparing employees with each other. Comparing employees creates hard feelings, damages morale and makes employees to compete so badly that they will not work as a team. And also, the manager can become a great target for hostility too. Forgetting appraisal is about improvement, not blaming. Performance appraisal aims to improve performance, not to find faults in employees or blame them. Managers who forget this end up developing employees who do not trust them, or even cannot stand them. That is because the blaming process is pointless, and doesnt help anyone. If there is a point to performance appraisal it must be getting the manager and the employees working together to have everyone get better. Thinking a rating form is an objective, impartial tool. Many organisations use rating forms to evaluate employees. They do that because it is faster than doing it right. However, ratings are subjective and rating forms do not indicate the actual performance of the employee. Stopping performance appraisal when a persons salary is no longer tied to appraisals. Managers conduct appraisals so long to justify or withhold a pay increase. When employees reach their salary ceiling, or pay is not connected to appraisal and performance, managers do not bother. Performance appraisal is for improving performance, not just about pay. Believing they are in position to accurately evaluate employees. Managers deceive themselves into believing they can evaluate employee performance, even if they hardly ever see their staff actually doing their jobs, or the results of their jobs. Most managers are not in a position to monitor the employee consistently enough to be able to assess well. That is why appraisal is a partnership between employee and manager. Cancelling or postponing appraisal meetings. Often managers postpone meetings at the last moment. But it says to employees that the process is unimportant or phony. If managers arent willing to commit to the process, then they shouldnt do it. Employees are too smart not to notice the low priority placed on appraisals. Measuring or appraising the trivial. The easiest things to measure or appraise are the least important things with respect to doing a job. Managers are fast to define customer service as answering the phone within three rings, or some such thing. That is easy to measure if you want to. What is not easy to measure is the total quality of service that will get and retain customers. Measuring overall customer service is hard; so many managers do not do it. But they will measure the trivial. Thinking all employees and all jobs should be appraised in exactly the same way using the Winter Drive November 2011 Sikkim Manipal University 9

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
same procedures. All employees do not need the same things to improve their performance. Some need specific feedback, some do not. Some need more communication than others; performance evaluation using the same approach cannot he done in all jobs. Pitfalls owing to human resource department Following are the pitfalls of human resource department: Focusing on and stressing on paperwork and forms. Human resource departments emphasis on the forms and paperwork overshadows the real purpose of doing appraisals, and then huge amounts of resources are wasted. When HR departments concentrate on getting the forms done, thats exactly what they get - Forms done. Believing that ratings based form of appraisal will serve as protection against challenges by employees. Performance appraisal form is not going to withstand legal scrutiny, because it is too subjective and too vague. Under training managers in the process. All that a performance appraisal technique needs is thorough training of the appraisers (managers) by the HR department. But, the HR department is usually content with designing some new forms, printing nut some basic instructions, and distributing them to managers. The assumption is managers will know the purpose, which goes often wrong. Not training employees. Both manager and employee should have the same understanding about why they are doing the appraisal, how it will be done and what is expected. This is because the only way it works is when employee and manager work together, in partnership. Thinking pressurising managers to get the forms is productive. One reason managers postpone with respect to doing appraisals is that they do not see the point, or see it as a waste of time. There are other reasons, too. Most can be handled by using approaches that take into account the needs of managers. Unfortunately, a goad many HR departments believe it is just a question of ordering, yelling, coercing or begging managers to get them done. That does not answer the reasons why managers arent doing them. If they feel they were useful, they would do them. The key to getting them done is to make them useful. Playing the appraisal cop. Unfortunately, HR departments get stuck with the responsibility of getting appraisals done by managers. Perhaps it is not their fault, but it is a strong indicator that the system being used has failed because in an accurately functioning system, each manager is assessed on a number of things, one of which will be their fulfilment of the performance management and .appraisal function. The responsibility lies with the management. If a manager is not accomplishing the responsibility, it is his or her boss that should be evaluating the manager. It is a cascading process. No appraisal system will work until each managers boss makes it clear that getting it done is going to be a factor in the managers own appraisal. =======================X=======================X=========================

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
Q4.Explain Carrier Planning in detail. Ans. What is career planning according to you? Well, career planning is a constant progression, which includes selecting a profession, getting a job, emerging in your job, probably changing careers, and ultimately retiring. Career planning can divided into the following steps with reference to performance management within an organisation. o Performance evaluation: An employees performance and capability shall be evaluated all through and at the end of the probationary phase and annually thereafter. These evaluations will be used to improve employee efficiency, measure training requirements and plan training activities. In addition, it also helps in providing a basis for decisions on promotions, separations, placements, salary advancements, and other personnel actions. Probationary Phase: The probationary phase is a primary part of the selection process. It allows the appointing authority to coach an employee and evaluate the employee's evolution, effort and adaptability. Generally, the probationary phase is six months in most of the organisation. However, it is extendable by the project or process head for a period not to go beyond six months for good cause. The employee may appeal directly to the career service council with reference to any undue extension of the period designated to prevent merit principles. Evaluating Probationary Employees: The appointing authority shall submit in writing for evaluation and approval for action at least one month earlier to the employee's eligibility to graduation from probation. The affected employee shall be notified of the action planned to be taken. Promotion: When it is in the best interest of the organisation to fill vacant positions from the internal current employees, the evaluation of eligibility may be limited to a specific project or department. Promotions shall be based on demonstrated capability, as well as excellence and duration of service. All promotions must be certified by the project or department head, director of personnel management, and the organisation commission. Training: Some of the employees may receive training to ensure high quality performance. Each elected superior and training head must develop and execute a program to improve the job and career related skills of employees so that they may deliver more valuable service to the organisation.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
Q5. What are the steps to be followed while building an ethical organisational culture? Ans. An ethical organisation culture is one which supports and promotes ethical behaviour within the organisation. The building of an ethical organisation culture requires: o o o o o A clear definition of the core values of the organisation. Selection of the most apt personnel. Rewarding of excellent ethical behaviour. Keeping a check on unethical behaviour. This section will give us an insight into the guidelines for building such organisation cultures keeping in mind the performance practices followed in India.

Let us first look into the ethics strategy involved to create an ethical organisation. The ethics strategy must be concerned with ensuring that all the organisational activities are ethical, legal, and within all the prescribed regulatory guidelines. The actions, be it right or wrong, generally arise from character. An ethics strategy should provide the road map to guarantee the ongoing development of both the individual as well as the organisational character. This can be achieved through the introduction of ethics programs to train the employees. It is important that the ethics strategy provides for monitoring and policing organisational activities so as to reduce and thus prevent ethical and legal violations. Ethics programs have become increasingly important, because a recent case law states that individual board members can be held liable for ethical lapses, in case ethical plans and programs are not incorporated. While developing an ethics strategy, regulatory requirements should be the prime consideration, as they impose a minimal, de facto ethical standard on every organisation. The plans and programs that are to be established should ensure that the organisation is in complete agreement with all these regulatory requirements. Once these regulatory requirements have been addressed, organisations can then work towards the enhancement of their corporate character. The ethics program should consist of a series of ethical training modules that is designed in such a way to educate and build ethical character on an individual basis. The ethics programs and training lay the necessary foundation required to ensure a continuous and deepening response to ethical issues as they arise for employees on the job. Eight steps to be followed while building an ethical organisational culture: 1. The right leader: An organisation can never be ethical unless the managers are role models for ethical behaviour and set the standards. They need to be clear about their values and exhibit them in actions as well as words. 2. A clear purpose and strategy: Three differences between companies that achieved high performance levels over long time spans and companies that failed when they reached a certain size were that the companies: Aimed on short term gains, and not on the long term value. Did not have a clear strategy. Badly mismanaged risk. 3. A focus on doing the right thing: For an ethical culture to prevail, it is important for the employees to feel responsible and accountable for their actions. Creating an environment where employees can stand up for what they believe is right and take responsibility is essential. Without it Winter Drive November 2011 Sikkim Manipal University 12

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
there cannot exist an ethical culture as small and large daily wrongdoings will tend to go unchecked. It is the regular employees who are aware of what generally goes on. The negative aspects are generally hidden from the management. Hence, the organisation has to create a strong culture of speaking up and standing up for what they believe is right. 4. Hire the right people: It is important to hire people with the right values, skills and knowledge. Interviews and assessment programs should be designed such that they help the managers to explore what people have done in certain situations and should be able to ask them about their rationale for their actions. 5. Fire the wrong people: If you do not fire employees for wrongdoing, you may be sending out a wrong message that behaving ethically does not matter all that much. Actions, as we all know, speak louder than words and people become very sceptical if they see their senior managers advocate one thing and do another. 6. Run training courses on values and ethics: It is very difficult to spot an ethical situation in the first place, then only comes advocating the best way to handle it. All employees should be educated with the required knowledge and skills so as to identify and tackle ethical situations. Running mandatory ethics training for everyone in the company will convey the message that ethics is of high priority. 7. Reward people for doing the right thing and challenge them when they do the wrong thing: It requires a lot of courage to raise concerns about the actions of colleagues. People should be encouraged to do so by rewarding them. This could be in the form of appreciation from the management which could include a positive mark in their performance appraisal. People often do not question the wrongdoing for fear of isolation from colleagues and management. Hence, care should be taken to see that they are actively encouraged to do so. 8. Do not tolerate mistakes: Generally, when people are afraid to make mistakes they tend to either always play it safe or cover up any errors for the fear of punishment. Both these can be a hindrance in the growth path of the company. Moral Judgment

Code of Ethics

Moral Values

Ethical System As seen, each of the systems is inter-linked. Neither of the four are independents. This just goes on to show how ones success is dependent on the other, that is, they are all inter-related. And how, all these together can lead to the success of the organisation as a whole. =======================X=======================X========================= Winter Drive November 2011 Sikkim Manipal University 13

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 1
Q6. What are the aims of Performance Management. Ans. One of the important objectives of performance management is identifying the strengths and weaknesses of employees and finding ways to overcome their shortcomings. This is done by evaluating employee output and the companys overall ability to meet the goals by having quarterly or annual audits. Often, after an evaluation, there will be widespread company meetings where managers and employees discuss concerns and solutions to problems. Another objective is to discover where employees and the company are falling short. This is done by going through details such as profits earned, new clients acquired and the contribution of employees to make these things happen. Employees whose contribution are minimal or not up to the mark are counselled on how to improve performance. The evaluation of an employees performance is based on their work output and the amount of time spent by them on the project. Although time spent in an office is not an accurate way of measuring performance, most companies still have the notion that better employees put in longer hours of work. A better way of measuring employee productivity would be to measure the output of work and the accuracy of work completed. Overall evaluation of a company and its ability to set and reach goals is another important objective of performance management. Increasing revenue is the overall goal of any company. Other goals may be to acquire more or specific clients, develop new products or hire new talent. It is very easy to determine which of these goals have been met, because these are things that can be seen or calculated. The inability of a company to meet the goals is mainly 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. To identify and remedy situations that hinder company performance is another important objective of performance management. This includes replacing underperforming employees, gaining new clients, developing new strategies for reaching the goals and discussing strategies that have worked in the past. 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. The aims of performance management can be summarised into the following points. o o o o o o o o The aims of performance management are: To assist in the achievement of enhanced standards of work performance of an employee or class of employees. To assist employees to identify the knowledge and skills to perform their jobs efficiently. To ensure that the employees work towards the defined goals. To ensure that the employees receive regular feedback on performance. To assist the employees to achieve personal growth through acquiring relevant knowledge and skills and attitudes. To evaluate the company and its ability to set and reach goals. To identify and remedy situations that are hindering company performance.

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