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ë In non competitive era, the focus was on Production .

ë Employees were rewarded for goals as set by the
organizations .
ë Hence achieving the end results by any means was
recognized and rewarded .
ë It was a firm assumption that the rewards and punishment
system would get the best out of the people.
ë Hence a need was seen to have some mechanism which
rewards people for the achieving the end goals which were
were quantitative in nature.
ë It was based on the assumption that a person
who is consistently performs well needs to be
given higher responsibility /grade.
ë Consistent current performance with experience
became a indicator of persons growth.
ë Hence Performance appraisals was the used for
checking the performance on current goals for
promotion purpose.
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ë -he factors that were assessed were

ë Performance on the Goals ( not clearly laid down )
ë Managerial traits displayed on the job ( difficult to measure )
ë Final rating as Excellent , VG/G/Ave/Poor
ë Increment and
ë Finally Reward or promotion
ë -raining programs to attend.

ë -he system suffered from many deficiencies

ë It was done once in the end of the year
ë Normally Goals were not written clearly at the beginning of
the year
ë Only boss assessed the subordinate
ë -he factors being measured were very subjective
ë It also suffered from recency error, halo error,similarity error,

ë Organisation -o help organisation to achieve its goals (Performance)
ë -o help employee reach his potential (Potential )
ë -he emphasis is on the way goals have been achieved ie Process used
ë Process is defined in the beginning
ë Judgement on quality of the process used
ë Judgement by multi-raters
ë Feedback for improvements
ë Salary decisions
ë Performance planning for the next year
ë Developmental plan
ë Career planning /job matching
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# |%to the system
ë Ñey result areas and measurable ÑPIs linked to organisation goals in
the beginning of the year
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ë Focus is on achieving ÑPIs using process & Competencies as
defined for role
ë Assessment forms have become scientific with clearly laid down
guidelines .
ë Individuals appraises himself and expresses his /her voice
ë Evaluation is done on clearly laid criteria and moderations are
done by committees to avoid bias .

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ë Increments / Incentives based on rating
ë Gap identification for development
ë Job rotations for development
ë Promotions are done based on potential appraisal /assessment
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—. Performance is basically an 

as seen based on goals achieved . Whereas the
potential is the hidden part of the person¶s
capability that he/she posses .
2. Potential is difficult to measure . Hence one
projects it based on the quality /delivery and
stretch an individual takes on goals.
3. A persons ability to take up next higher level of
job is basically depends on competencies that he
posses for next role .Most often people are
measured on current competencies and promote
them .
4. One needs to check the potential in terms of
competencies displayed in relation to next role .
o. -he assessment of potential is done
thru multi level assessment by internal
committees or external agencies.
6. Ideally the reward for performance
should be monetary where as the
reward for competencies displayed
/potential should be increase in
responsibility of the person. /growth
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ë It is most important part of the PMS

ë -o capture work done during the year in 2 or 3 pages
ë Assessor also need enough data to evaluate and judge a person .
ë Objectivity of the process depends upon how well the system is
designed and implemented for uniform implementation at every
ë One needs to explain various terms and parameters with examples
in the PMA manual so that each one understands the process as
intended .
ë -raining of assessors is another important aspect .How to
evaluate the ÑPI and competencies must be known to all
assessors .
ë It is normal to observe bias and different way of rating by assessors
in the organisation. System for moderation is a must .

ë Most organizations use Performance appraisal form to
assess the potential .
ë A judgment is made on potential of the person to take up
next level role .
ë But some organizations use assessment by committees to
assess the potential
ë Assessment Center is one of important tool used by some
organizations to assess the potential of the person.

—. -he supervisor or boss plays the role of judge as well as the helper who
has to help the assesses in developing. He gets rated on output and not
on development of people.
2. Non clarity of Objectives. Is it for development or target achievement or
rewards or career planning or execution of annual plans.
3. Operational pressures force supervisors not to spend time with his
subordinates and observe them.Ultimately he goes by his limited
observations .
4. It becomes too late to get feedback as the process provides for yearly
feedback. Bosses wait for a year to give feedback.
o. Employees are not given clear cut goals and adequate resources and
powers to execute plans .
6. Bosses are not trained on assessment of people. Hence assessment is
based on perceptions.
7. -he Boss is always right makes it imperative for a subordinate to accept
the ratings given.

ë A well documented system
ë A well trained manpower of assessors
ë A well designed goal setting system
ë A mechanism for assessment on goals with weightage on process
as well on ÑPis
ë ÑPIs should be qualitative and quantitative to meet internal
Organizational and external customer requirements
ë A well defined competency matrix for each level
ë Should not be used for rewards as well finding out development
gaps .
ë Should record the feedback given to employee by assessor .
ë Employees grievances are addressed by HR after the evaluation .