Indian HR

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.

People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Performance appraisals of Employees are necessary to understand each employee’s abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance.

Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement.

Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims.

The latest mantra being followed by organizations across the world being – "get paid according to what you contribute" – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual’s performance. It helps to align the individual performances with the organizational goals and also review their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees.



Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart of personnel management and reflects the management's interest in the progress of the employees.


Objectives Of Performance appraisal:

To review the performance of the employees over a given period of time.


To judge the gap between the actual and the desired performance.


To help the management in exercising organizational control.


Helps to strengthen the relationship and communication between superior – subordinates and management – employees.


To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.


To provide feedback to the employees regarding their past performance.


Provide information to assist in the other personal decisions in the organization.


Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.



To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.


To reduce the grievances of the employees.


PERFORMANCE APPRAISAL PROCESS


ESTABLISHING PERFORMANCE STANDARDS
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization.

The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.



MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.

DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

COMPETENCY MODELS FOR 360 FEEDBACK SURVEYS

The first thing to decide is whether you want to work from an existing competency model or develop your own. Resist the temptation to re-invent the wheel. Many companies spend a great deal of time and effort creating a "unique" competency model for their 360 degree feedback program which ends up looking quite similar to our existing competency model.

If you will use 360 feedback surveys on a limited basis in your organization, consider using an existing competency model, perhaps with some minor adjustments to the evaluation form as needed.

For a company-wide 360 degree feedback program, you may want to spend some time developing a more unique competency model that incorporates your organization's leadership model and core values as well as the behaviors and performance standards that are expected of all employees.



Establishing the Core of your 360 Competency Model

Some aspects of your competency model will be the same for all employees, regardless of function or level within the organization. Call this your "core". The core of your 360 survey will include the following:

Items related to company values, mission, and vision

Competencies and expectations that apply to all employees, from the CEO down to the individual contributor.

Many competencies or behavioral categories will apply to employees at all levels, but the specific behaviors in each area will often differ. For example, "Interpersonal Skills" are important for everybody, but the expectations and requirements related to "Interpersonal Skills" will be quite different at different levels in the organization.

Other competencies will only be relevant at certain levels. For example, "Building Talent" is an important area for mid-level management and above, but not at all relevant to non-managers.

Beyond the Core

It is less important to distinguish between functional area, especially for mid-level management and above. Focus on identifying 3 or 4 distinct vertical levels within your organization. For example:

1. Senior Leaders
2. Mid-upper Managers
3. Lower-level / First-line Managers
4. Individual Contributors (Non-managers)

For each of the 3-4 levels, the competency model will start with the "core", but also include the specific behaviors needed to succeed at each level.

Remember - don't reinvent the wheel. As you develop your competency models, reference our standard competency model as it will help you fill in the gaps as you create your own. The top-level categories will be based on statistical analyses and field experience. They are:

- Knowledge/Strategic
- Character
- Interpersonal
- Innovation/Change
- Building Talent
- Leadership/Motivation
- Execution

Different Competencies for People at Different Levels

If you are developing a 360 survey that will be used by people at different levels within your organization, the mix of categories and items will vary quite a lot across the various levels. It might help to think about the different levels in terms of the requirements for success in the following three areas:

Vision, Strategy, Inspiration

- Upper levels should include a lot of detail in this area.

- Middle levels should include some items in this area, but not too many. This is an opportunity to help people see what they will need to succeed at the next level, and also an opportunity for you to identify high potentials for promotions. Some degree of inspiring and motivating is relevant for anybody in a management role.

- Lower levels, especially individual contributors, should not include items in this area.



Teambuilding and Relationship Building

Upper levels should include a lot in this area, but some of the things that are included for mid-level might be excluded here. You do not have to be as thorough with regard to basic skills. Instead, focus more on support and relationship building at a higher conceptual level, and creating strategic alliances with other parts of the organization.

Middle levels should include a lot of detail in this area with regard to people-skills, team management, and fostering team effectiveness.

Lower levels should include a reasonable amount here, but look for areas that don't include things that are only relevant for higher levels. Include things related to working with others, cooperating, listening, and supporting team efforts.


Task Management and Execution

Upper levels should include items that are more focused on achieving results - they would not have reached the upper level if they had not been successful at the basic skills when they were at a lower level.

Middle levels should include quite a lot here, but some of the most basic items could be excluded.

Lower levels should include a lot in this area, focusing on the basic, fundamental skills of task management and job performance.

When you are finished, you will have 3-4 competency models along with a list of survey categories and items for each one. By following these steps, you will have a vertically integrated approach that uses a common core across all levels, but that also maps out a progression from the bottom of the organization to the top.


Here is an example of how a specific category might apply across all levels of the organization, but vary in its nature, depending on level:

Teamwork

Upper Levels

Encourages cooperation and collaboration between business units
Establishes partnerships at all levels to achieve results

Middle Levels

Resolves conflicts among team members
Sets clear, achievable goals for all team members to follow

Lower Levels

Works effectively to achieve team goals
Cooperates effectively with team members

TRADITIONAL METHODS


1. ESSAY APPRAISAL METHOD
This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.


2. STRAIGHT RANKING METHOD
This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.


3. PAIRED COMPARISON
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.


4. CRITICAL INCIDENTS METHODS
In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.


5. FIELD REVIEW
In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias.




6. CHECKLIST METHOD
The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.


7. GRAPHIC RATING SCALE
In this method, an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.


8. FORCED DISTRIBUTION
To eliminate the element of bias from the rater’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.


MODERN METHODS


ASSESSMENT CENTRES -

An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees.



BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for eg. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents.

In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge.


HUMAN RESOURCE ACCOUNTING METHOD

Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.

Prerequisites for Successful Communication of Vision, Mission and Core Values

Many organizations have their Vision, Mission and Values and are very proud of it.

But how many organizations do actually align their actions to the vision and values set? How many company actually communicate the vision effectively to their key stakeholders? Organizations do generally communicate their vision, mission and values to key stakeholders, especially to the employees But most often then not, many employees are not able to grasp a good understanding of the concept.This is made worse by the actions of the organizations which could be contrary to the values stated.

Organizations spend many hours of the leadership time to develop the vision, mission and values. Hence, it is important for the organization to provide a powerful meaning to the Vision, Mission and Values.

The following 5 Prerequisites are mandatory in order to give life to the organizations visions, missions and values:-

A. Strategic Planning Process

Successful organization will have an annual Strategic Planning Process (SPP). This is normally done off-site and attended by the senior management team. The senior management team normally meets for at least two days to discuss among others customer satisfaction results, external environmental factors such as market trends, economic data and other relevant data The intent here is to review, analyse and align the input data to the vision, mission, values and core competencies. SWOT analysis is a common tool used during the strategic planning process. Gaps identified during the SPP will be used to develop short and long term action plan. For effectiveness, it will be good for each senior manager to become a champion of the action plans. They can then form cross-functional teams to implement the plans.

B. Deployment of Vision, Mission and Values to the Employees.

This is a very critical part in ensuring the success of the Vision of the organization. Most companies do not do well in this area. For effective deployment, it is suggested, that the organization develop a standard communication process for the whole organization. The process should include among others identify audience, communication channel ( training, meeting, bulletin board posting, e-mail and etc.) and the person who will do the communication. The communication shall be logged in for record purpose, including attendance.



C. Reinforce through annual Performance Management Process To reinforce the understanding of the vision, mission and values, it should form part of annual individual performance review and development process. Each individual will have Key Performance Indicators that is directly or indirectly linked to the vision.

Another method of reinforcing the vision and values are through making it a mandatory requirement to discuss at least one core values during any meeting. The discussion can be short where examples can be shared on how the value was displayed in the organization.

D. Senior Leaders Personal Actions

To further reinforce the organization values and visions, senior managers should spend at least 10% of their time at the floor level, interacting and getting to know the employees, becoming a role model and listening to the employees point of view.Employees can also give their views on the values and visions and how it can be better deployed.

E. New Employee Orientation

All new employees must go through an induction program. Among the induction they have to go through, is the session with one of the senior managers on the company vision, values and missions.

The above mentioned 5 actions, if done well by the organization will set the entire organization along a common goal and objectives.

Here are a variety of no-cost things you can do to begin building your employment brand.

Benchmark and learn all you can internally from successful product and employment brands. Do the same externally (especially look at Cisco, GE, HP and IBM).
Assess your organization's current management practices, benefits, culture, etc., to identify what you "have to sell" and what you need to improve.
Do a quick survey or assessment of your current employment "image" among employees, applicants and general public using surveys and focus groups.
Calculate the potential ROI for branding and sell the idea to management.
Develop a catchy slogan that highlights your very best "great place to work" feature(s).
Develop a people-program inventory that lists each of your organization's unique human resource or people programs. This list should be used as ammunition to highlight your best practices in marketing pieces and in media articles.
Identify company products and programs that involve innovation, help save lives or protect the environment. Use these stories and examples in recruiting materials.
Rename some of your successful people programs with "catchy" names that grab people's attention.
Do a side-by-side comparison of your benefits and people pro-grams against those of your talent competitors. Identify areas where you are clearly superior.
Identify and assess your competitors' employment "brand" against which you'll be competing. Develop a branding strategy that high-lights the differences between you and your competitor.
Compose one or two-paragraph profiles of individual employee "success stories" for use in articles and on the Web site.
Work with the CEO's office to get top executives to mention your organization's great people practices both in their internal and external communications. When necessary, write that section of the speech for the CEO.
Apply for listing in the Fortune 100 Best Places to Work list.
Work with the PR department to identify public events that the company is sponsoring. Send managers and recruiters to talk about the company's great people practices. The recruiting department should also add a few of the marketing staff to its advisory team to offer suggestions and to coach recruiters on the latest marketing tools and strategies.
Work with the sales department to identify public sales events and trade shows where materials highlighting your great people practices can be displayed.
Quantify the participation and usage of your work-life balance and other similar high-profile people programs. Quantifying the usage sends a more powerful message than merely saying "we have a program."
Rank potential media and tools to convey branding efforts (based on what your target audience reads or attends), and then select the initial media and methods to convey the branding message.
Review articles that mention different companies' people pro-grams. Then develop a list of the criteria used by local publications when they select a company or people program to feature. Utilize these criteria for selecting which program stories you should high-light in your branding effort. In addition, build relationships with local publications and their reporters. Volunteer to act as sources, and encourage them to write stories on your great people and management practices.
Identify the target market (the type of candidate you are trying to attract) for your branding efforts. Develop a target profile for them (who they are; where to find them; what they read; events they go to; etc.).
Get key managers to write articles and give talks at industry association meetings. Be sure they include great people practices in their materials.
Get managers to give talks at community meetings and at the local Chamber of Commerce that highlight your people practices.
Invite family and friends of employees on site to see "what it is like to work here" and the importance of employees' work so that they will help spread the word on what a great place your organization is to work.
Offer benchmarking sessions on your great "people practices" to teach your customers and suppliers how you do great people man-agement in an attempt to get the attendees to spread the word.
Profile key employee success stories and best management practices on your corporate career web site. Periodically highlight your great people practices in internal publications to remind employees of the great things you do.
Cosponsor "career workshops" in schools to build your im-age early.
Ask the union, if you have one, to help spread the word about what a great place to work you are.
Encourage local college professors to visit and write "case studies" and articles about the company's people practices.
Participate in industry-wide benchmarking studies to help build your visibility.
Have human resource leaders speak at public human resource seminars and write articles for human resource trade publications about your people practices. Have them join the boards of local nonprofit groups and associations to help spread the word.
Include marketing and branding experience in the criteria you use to hire additional recruiters.
Create a process to measure and evaluate the program's effective-ness, monitor its progress, and improve it.

LOW-COST BRANDING TOOLS
If you have a little money to spend on human resources branding, here are some low-cost things to do.
Re-energize your existing employee referral program and set "targets" for referrals from each department. Include participation as part of the normal performance appraisal process. Provide employees with cards listing the top ten reasons why it's great to work for your company.
Encourage employees to put decals, license plate holders, etc., on their vehicles to broadcast their loyalty. Sell or distribute employment-branded items (hats, T-shirts, pens, etc.) that depict work at your organization.
Participate in community clean-up programs; get your organization named on "clean-up" highway signs.
Develop an alumni club for ex-employees and retirees. Involve these former employees in the process of spreading the word.
Distribute logo book bags, T-shirts, and other similar items to children; sponsor school events.
Work with the advertising department to place ads that occasion-ally highlight your great people and management practices as well as your products.
Train and reward managers for excellent people-management performance.
Conduct surveys of college students, business writers, academics, executive recruiters, and influential business leaders as well as your employees to assess your perceived strengths, weaknesses, corporate culture and image.
Revise recruiting practices to include "wow" elements to make a lasting impression. Continually review your recruitment strategy and team capabilities.
Have the CEO or human resource vice president write a book about the organization's people-management practices.

POSSIBLE DISADVANTAGES OF BEING A SOUGHT-AFTER EMPLOYER
There is also a downside to being a choice employer--a possible downside to your branding efforts. Some of the possible problems include:
Executive recruiters often target your organization's management and its employees.
The strength of the corporate culture makes changing it (as well as many operational changes) difficult.
Because of their "fame," the organization's employees have a tendency to become overconfident.
Performance measurement and willingness to accept criticism often diminish due to this overconfidence.
The company's image must be defended continually. Minor errors can be blown out of proportion by the press.
Pay levels (and thus costs of production) can be high due to the high cost of maintaining a world-class workforce.
New recruits may have unrealistic expectations based on image that can turn into disillusionment if everyday reality does not match.
Being an employer with a great reputation helps an organization grow, and this increase in size makes maintaining the culture and the "choice employer" status difficult over time.