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13 FEB,

Report Title: Performance Management

201 2

Human Resource Management

Report Title:



1 GROUP H MBA 3rd M1

Report Title: Performance Management

In the name of

The most Gracious, The most Merciful

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Report Title: Performance Management

Department of Management Sciences

Group Name: Group Members: H Aimen Tanveer Asma Hameed Muhammad Waqas Muntaha Tatheer Sayda Rahat Rafique Mudassar Zaid Subject: Stage/ Year: Study Mode: Lecturer Name: Report Title: Due date: 01 05 27 28 36 42

Human Resource Management MBA 3rd (14 yr M1) Full time Hassan Danial Aslam Performance Management 13 Feb- 2012

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Report Title: Performance Management

Submitted date: 13 Feb- 2012

lagiarism disclaimer

We understand that plagiarism is a serious offence and have read and understood the University policy on plagiarism. We also understand that We may receive a mark of zero if we have not identified and properly attributed sources which have been used, referred to, or have in any way influenced the preparation of this report, or if we have knowingly allowed others to plagiarize our work in this way. We hereby certify that this report is our own work; based on our personal study and research, and that we have acknowledged all material and sources used in its preparation. We also certify that the report has not previously been submitted for assessment and that I have not copied in part or whole or otherwise plagiarized the work of anyone else, including other students.

Signed & dated: 13-02-2012

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Report Title: Performance Management

5 GROUP H MBA 3rd M1

Report Title: Performance Management

This report is dedicated to our Lovely and most respectful Parents and Teachers

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Report Title: Performance Management

We wish to express our genuine gratitude to Mr. HASSAN DANIAL; lecturer of Department of Management Sciences IUB, for providing us an opportunity to do our report work on Human Resource Management related to our subjected matter. This review highly supports us to understand the concepts and applications of HRM. We want to express a sense of gratitude and love to Allah and then to our friends, group members and our beloved parents for their manual support, discussions, strength, help and for everything.

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Report Title: Performance Management

1.1. 1.2. 2.1.

able of content

1. Introduction
Determinants of Performance Environmental Factors as Performance Obstacles

2. Introduction; Performance Management

Responsibilities of Human Resource Department in Performance


Performance appraisal
3.1. Introduction and uses

3.2. 3.3.

Why appraise performance? The Supervisors Role

3.4. Steps in Appraising Performance 4.

Basic Concepts in Performance Appraisal and Performance Management

4.1. Comparing Performance Appraisal and Performance

Management 4.2. Why Performance Management?

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Defining Employees Goal and Work Efforts

Elements of Performance Appraisal

5.1. 5.2. Performance standards Performance measures:

6. Performance appraisal process

6.1. 6.2. 6.3. 6.4. Job analysis Design a Performance appraisal system Performance review: Setting a plan of action

7. Who conducts the performance appraisal?

7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8.

Supervisor: Co-workers: Employees themselves: Subordinates: Computers: Customers: The job itself: 360-Degree Feedback:

Past Oriented Appraisal Methods

8.1. Rating Scales

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8.2. 8.3. 8.4. 8.5. 8.6. 8.7. 8.8. 8.9. Checklist Forced Choice Method Critical Incident Method Accomplishment Record Behaviorally anchored rating scales Field review method Performance test and observations Comparative Evaluation Approaches

8.9.1. Ranking Methods 8.9.2. Forced Distribution Method 8.9.3. Point Allocation Method 8.9.4. Paired Comparison

Future-Oriented Appraisals
9.1. 9.2. 9.3. 9.4. Self-Appraisals Management by Objectives Psychological Appraisals Assessment Centers

10. Implications of the appraisal process 10.1 10.2

Training Raters and Evaluators Evaluation Interviews

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Report Title: Performance Management 11. Strategies for Effective Performance Appraisal Systems 11.1 11.2 11.3 11.4 11.5
Objectives for performance appraisals Formal versus informal performance appraisals Objective Vs. subjective performance appraisals Frequency of performance appraisals Types of performance appraisal methods Selecting a performance appraisal method Tips for developing a legally defensible performance

11.5.1 11.5.2

appraisal system


Strategy and the performance appraisal process Organizational strategy


12. Developing performance improvement plans 12.1 The Changing Nature of Workplace 12.3
The Role of HR in creating integration

12.3 High Performance Work Practices 12.4 How can HR help to implement high-performance work practices? 12.5 Reward strategies 12.6 Need to revise reward strategy 12.7 What reward strategies are appropriate in changing organizations?
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Report Title: Performance Management 12.8 How do people wanted to be rewarded? 12.9 Conclusion 13. Models for performance management 14. Performance Appraisal Challenges
15. How to avoid appraisal problems


Performance is the degree of accomplishment of the tasks that make up an employees job. It is measured in terms of results that how well an employee is fulfilling the requirements of the given job. Sometimes it is mixed with the term effort that actually refers to the energy spent (Byars and Rue, 2006; Dessler and Varkkey, 2008). 1.1 Determinants of Performance Job performance is determined by efforts, abilities and role perception of an employee. So, particularly performance is measured by all three determinants as it interrelationship among all. Efforts, performing a task as being motivated, spend an acceptable amount of mental and physical energy. Abilities, individuals personality traits used in performing a task well. Role perception refers to how the individual should direct himself to perform the job (Byars and Rue, 2006). To achieve high level of performance all above features of job performance must be incorporated. The level of proficiency in any of the component has a tremendous effect on other because one component is not properly
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maintained while performing any task the performance of employee will go negative (Byars and Rue, 2006). 1.2

Environmental Factors as Performance Obstacles

Along with the determinants effort, abilities and role perception there are also some uncontrollable factors which also effect job performance. These obstacles are usually conflicting job hours, improper facilities and equipments, conservative policies, lack of cooperation, supervision style, temperature, lightening, noise, pacing of equipments, shifts time. Environmental factors are indirect determinants of individual performance and modifying factors for direct determinants. Poor ventilation, worn out equipments, unclear policies, lack of training can affect individuals performance. This is the responsibility of management to provide its employees the best working conditions with supportive environment to maximize performance (Byars and Rue, 2006).


Introduction; Performance Management

In any organization, performance management acts a role of a backbone among the practices of human resource management. It has been realized widely that performance management practices have the ability to determine employees motivational level and can act as a strong tool that can convert employees possible capabilities in to their performance. To make sure the practical implementation of performance management, different organizations are following different approaches. Although according to experts there is no single model and strategy among performance management practices that can be applied universally and can serve as effective & workable as well. Therefore, understanding about practical implementation of widespread issues that include compensation and reward, acknowledgement techniques, setting of performance goals and their appraisal , quality of work facilities to execute the task assigned and awareness about possible danger to judge about capabilities of people are to be needed. All these practices should put in a straight line to make a single strategy and model of performance management


Responsibilities of Human Resource Department in Performance Management

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Performance management system can be incorporated by the coordination of human resource department and organizations management that is responsible for conducting appraisal system (Dessler and Varkkey, 2008). Responsibilities of HR department are; Creating the design of performance management system and selecting the methods for appraising employees. Providing training to performance appraisals management personnel for conducting

Appraisals are conducted on timely basis, for this purpose a reporting system is maintained (Dessler and Varkkey, 2008).

In performance appraisal system the responsibilities of managers are;

Employees performance evaluation. Ensuring that forms are completed by employees and are returned to human resource department. Maintaining review system with employees. Establishing employees improvement plans (Dessler and Varkkey, 2008).


Performance appraisal

3.1 ntroduction and Uses

Performance appraisal is referred to as assessment of an employees job performance for establishment of improvement plans .Appropriate performance appraisal system not only helps management in performance assessment rather have a great impact on enhancement of effort and task direction to be performed. It is most commonly being used in decision making for the determination of promotions, lay offs, firings and merit pay increases. An employees performance is a significant factor while determining promotion given to a person. It is not always the case that an efficient performer can also perform effectively when promoted to a higher rank, for this purpose some predictive information is also provided (Dessler and Varkkey, 2008; Werther and Davis, 1996).
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This system helps management as follows; Input to the validation of selection procedure.

Input to human resource planning.

Input to the validation of selection procedure The predictive information provided helps out management in determining required inputs for training and development of individuals and organization. It helps in identification of individuals strengths and weaknesses and also organizations required training and developments (Dessler and Varkkey, 2008). Input to human resource planning Performance appraisal system is also used to persuade performance of employees regarding recommended changes in behavior, attitude, skills, knowledge and abilities. This feedback helps employees in fulfilling managers expectations regarding their performance and managers can also coach and train employees to influence their work efforts. A major concern is to determine frequency of appraisals, often performance appraisal is conducted annually in organizations but it is suggested to that most of the employees need informal performance appraisals to be conducted twice or thrice in a year in addition to formal one. Because they have to know the type of job they are doing, in case of dissatisfactory performance what measures could be taken for improvement (Dessler and Varkkey, 2008).


Why appraise performance?

There are several reasons to appraise performance of an employee; these are mentioned as follows; Appraisals play a vital role in performance management systems in order to interpret organizations strategic goals into particular employees goals and then provide training accordingly. It helps to develop a plan for correcting deficiencies if any and to emphasize the things done effectively by workers. It provides the break through to evaluate employees performance, through his or her own strengths and weaknesses to offer career planning. It
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provides guidelines for decision making regarding promotions and pay rise (Dessler and Varkkey, 2008; Byars and Rue, 2006).


The Supervisors Role

As the role of supervisor is concerned, performance appraisals would be quite challenging for them therefore its their responsibility to provide honest services to their employer and to subordinates as well rather to rate them too high or too low. Therefore they must have known how about techniques to be used and problems to be occur to conduct fair appraisals (Dessler and Varkkey, 2008). HR department formulate policies and provides general guidelines to operating units heads for their implementation. While in some firms, HR department prepares detailed forms and all departments use them, they also train supervisors for better implication of appraisal system. HR department monitors the system and ensures that rules and procedures being implicated must comply with EEO laws (Dessler and Varkkey, 2008).


Steps in Appraising Performance

Define a job, satisfaction of job duties and values. Appraise performance, evaluating performance and comparing it with standards to measure the difference by using ratings. Feedback, performance progress and improvement plans.

Performance appraisal system is a three step process that contains;

Generally appraisals are conducted using predetermined and formal methods. The most important concerns of appraisal tools used are; what to measure and how to measure? What to measure refers to particular dimensions such as quality, quantity and timeliness of work completed. While how to measure refers as different ranking and rating methodologies used (Dessler and Varkkey, 2008).

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Performance Management
All the organizations conduct formal and informal methods of appraising performance of their employees. Performance appraisal is the evaluation of an employees current or past performance regarding his or her performance standards. It also supposes that employee understanding about his or her standards and also supervisor provides with feedback, development and incentives needed to improve performance above par (Dessler and Varkkey, 2008).


Comparing Performance Appraisal and Performance

Performance management is taken up by many managers as integrated process of setting up of goals, providing training to employees and also rewards system. Performance management is defined as a process that consolidates goal setting, performance appraisal and development into a single, common system whose basic purpose is to make sure that employees performance is according to companys goal. It includes that practices by which employees goals and work, capabilities, evaluation and rewarding an employees efforts along with the organizations frame work (Dessler and Varkkey, 2008).


Why Performance Management?

Performance management put stress on integrated nature of setting up of goals, appraisal and development. It also shows that traditional methods are not only ineffectual but also counterproductive. It is also helpful in recognizing individual employee contribution towards the achievement of organizational goal. It also helps in continuous improvement that is a managerial philosophy continuously set higher quality, costs, delivery and availability. It also eliminates wastage like over production, defective production, unnecessary down time, transportation, processing cost, motion and inventory. The main idea is each and every employee must continuously improve his or her performance throughout the time period provided to prove them (Dessler and Varkkey, 2008).
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Report Title: Performance Management 4.3

Defining Employees Goal and Work Efforts

of how an individual performs

According to the performance management process employees efforts must have to be goal directed. First of all, appraisal should be conducted on the

according to his own standards and expectations. Secondly, the goals set by the employees and their performance standards must comply with companys strategic goals.

Assign specific goals. Assign goals that should be measurable. Assign goals that should be challenging but achievable. Persuade employee participation. (Dessler and Varkkey, 2008).


Elements of Performance Appraisal

While conducting an effective performance appraisal performance related standards, measures of those criteria and feedback given to HR department and employees must have to be identified. If such measures and standards are not job related incorrect evaluation will results in biased results, spoiling manager and employee relationship and also violation of equal opportunity law. And without effective feedback HR departments information system will not be able to provide accurate records on which decisions are made (Werther and Davis, 1996; Byars and Rue, 2006). HR department develops different performance appraisal approaches for managers, professionals workers and all other groups to ensure standardization that will help in comparing the results. HR department itself conducts performance appraisal quite often may be once a year but if supervisors evaluates the performance of employees 92% of the time it would be the best. However 360degree evaluation i.e. being evaluated from all directions gives additional viewpoints (Werther and Davis, 1996). Practicality; in the system must be ensured because impractical system may result in bitterness and confusion.

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Standardization; is intensively required to carry on even practices. A standardized system can result in well thought out standards and measures (Werther and Davis, 1996).


Performance standards

Performance standards are the benchmarks for the measurement of performance. To conduct effective performance appraisals standards should be job related. With the help of job analysis particular performance criteria are revealed by observing the current employees on the job. There should be a written record of standards to be advised to employees before evaluation. Performance of each employee must have to be critically analyzed through job analysis (Werther and Davis, 1996). 5.2

Performance measures

Performance measures are those ratings used to evaluate performance. These measures should be easy to use, consistent and analyze critical behaviors for the purpose of effective performance appraisal. While conducting job analysis, analyst should observe critically. These observations can be direct or indirect. Direct observations method is conducted when analyst watches the performer directly doing his work. Indirect observations are when analyst only observes subtitles, these subtitles are called constructs. Like evaluation of a telephone operator about handling with emergency calls as per companys policies through a written test. Performance measures could be objective or subjective (Werther and Davis, 1996). Objective measures; signs of job performance that are countable or measurable as they are quantitative. E.g.; while evaluating telephone operator number of misdialing can be counted (Werther and Davis, 1996). Subjective measures; based on judgments and opinions of analyst observing the performance of particular employee(s) (Werther and Davis, 1996).

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Key Elements of Performance Appraisal System

Employee performance Performance appraisal Employee feedback

Performance measures

Performance related standards

HR decisions


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(Adopted from: Human Resource and Personnel Management by William B. Werther and Keith Davis)

ypes and Accuracy of Performance Measure




Very High

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erformance appraisal process

There are a number of human resource management activities which are closely related with a performance appraisal system, and these should be considered while developing a performance appraisal system. This sequence of activities defines a process for the development of performance appraisal system. Some of these activities are demonstrated in the table and are explained below (P. Anthony et al, 1993).

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Job analysis

A detailed job analysis provides a foundation for establishment of performance appraisals. Without knowing the job discription and specifications of a purticuler job how an employee performing that job could be evaluated and appraised. So the duties, responsibilities, working conditions and activities of the job should be defined clearly in order to evaluate the performance (P. Anthony et al, 1993).

Performance standards
On the basis of job analysis information, performance standards must be derived, that is acceptable performance levels should be developed against which performance of human resources will be compared. A high-quality performance standard portrays that after the completion of a specific activity what a worker is ought to be produced or accomplished. Standards should answer several questions such as what, how much and by when. Some vital basics should collaborate with

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Performance standards. First, Standards should be in black and white so that workforce could become familiar with satisfactory and objectionable behaviors. Second, unrealistic standards, expectations and challenges will cause employees to give up and not struggle at all as they suppose that accomplishment of high expectation is unattainable. Finally, time structure must be specified and targets ought to be measureable and recognizable (P. Anthony et al, 1993).

Design a Performance appraisal system

For an effective performance appraisal system, workers should be assessed on the particular dimensions of job performance. Dimensions used to evaluate the job performance of the employees should not be deficient, distorted, contaminated or irrelevant. That is, job dimension should measure all important aspects of performance, it should not be lacking, it should emphasize each components importance towards the job, it should not be unclear, it should not include off the point issues that are not fundamental to overall victorious performance. The job dimension which measures the aspects that are really significant in determining job effectiveness would be considered relevant (P. Anthony et al, 1993).


Performance review
The performance review is the actual dialogue about the ratees performance which transpires between the rater and ratee. Study recommends that performance review should be a mutual discussion and be approx 60 minutes long. But according to employment surveys the majority of workers reported that their last performance review meeting continued up to 15 minutes. Two peoples the appraiser and the appraisee are involved in performance review so it should entail an exchange of information between these two parties. Three most common

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forms of this information exchange are closed reporting, open reporting and coaching (P. Anthony et al, 1993).

Setting a plan of action

At this end the worker should be well alert of his strong and weak points as well as he must have a clear idea regarding his performance assessment. Both the supervisor and the employee should focus on the future, for establishing a plan of action job performance objectives should be discussed with the contribution of both the supervisor and the worker. After making the analysis of the job performance and plan of action supervisor sets objectives based on the part of plan up to the next evaluation stage. These objectives supply the route and supervision regarding what is expected from the employee. But it is surprising that supervisors are not provided with any training in this area. To certify the victory of any performance appraisal structure, comprehensive training programs should be conducted for supervisors so that new evaluators could be skilled and existing evaluators proficiency can be polished (P. Anthony et al, 1993).

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Who conducts the performance appraisal?

A number of individuals or groups can conduct employee assessment process. For example in some organizations, more then one supervisors rate the performance of human resources and through this trustworthiness of performance assessment can also be enhanced (P. Anthony et al, 1993).

Different resources that can provide services are as in the following chart;



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Immediate supervisor is most regular assessor of human resources, observations illustrates that 90 % of the performance assessments are executed by the supervisor. They have an everyday contact with human resources and they can achieve detailed information about the performance of employees (P. Anthony et al, 1993).



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Most of the times employees are possibly quite painful and unwilling to evaluate their co-workers, one study has revealed that more stable plus most accurate evaluation of employee performance is peers evaluation. It is beneficial when contact among manager and worker is restricted. Peer rating is the vital element in the performance appraisal system (P. Anthony et al, 1993). 7.3

Employees themselves
Sometimes an opportunity is given to the workers to evaluate their own performance; many are hesitant to employ in self ratings. This information can be tremendously valuable for the manager. Study establishes that workers have a tendency to raise their ratings, which are specified with the chance to assess themselves. So the self ratings of group of workers is mostly higher then that of supervisors. Additionally range of ratings for high performance was much smaller of workers then supervisors, however women have a tendency to rate themselves inferior then do their manager. But Self evaluations and conversations can be an exceptional technique to encourage and build up employees (P. Anthony et al, 1993).


While examining the performance of managerial staff Subordinates are capable of be a precious resource of information. This information is not only helpful for determining how well a manager directs, corresponds, plans, assigns and categorizes but in addition to identify universal problem regions inside a department. Subordinates assessment for managers is important only if information is collected in an environment of trust and honesty (P. Anthony et al, 1993).


In some of the organizations, computer is being used to examine, control and assess employee performance but monitoring workers by computers is unlock to serious attack of privacy issues. A few legislators are making efforts to bring in legislation so to bind the exercise of computer monitoring in organization. Regardless of all these, computerized assessments possibly will a precious assist to human resource administrator. But it must be

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beneficial for both the workers and the manager, conditioned for being effective (P. Anthony et al, 1993).


Mostly In service providing organizations, customer is in an ideal situation to supply performance feed back. For example in restaurants the customer feed back for workers is best source for providing services to the customers according to their requirements (P. Anthony et al, 1993).


The job itself

Employees can get feed back from their day to day job performance. For example if an employee have not performed his part of job, while others are waiting for his part of performance to be completed so that the can make further processing, here this employee can feel that he is not performing his job up to the mark (P. Anthony et al, 1993).


360-Degree Feedback
The 360 degree feedback which is also known as multisource assessment is used for the development purpose rather then to increase the pay or other benefits. More then 29% respondent employees use it. In this all the people around the employee are involved in the rating. It includes the supervisor, peer, subordinates, internal or external customers. And there is also a significant relationship between the 360-degree feedback and the performance rating. Some organizations are also against of it but the studies show that the organizations are also adopting this method. This requires a careful assessment of the potential cost of this program (Byars & Rue, 2006; Werther & Devis, 1996; Dessler, 2006).


Past Oriented Appraisal Methods

Academicians and practioners have created many methods to appraise performance. These techniques help to minimize certain problems

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encountered. Past oriented methods have advantage that they deal with past performance that is already taken place. But when evaluation takes place employees can improve their future performance (Werther and Davis, 1996). The most acceptable techniques are:


Rating Scale Checklists Forced Choice Method Critical Incident Method Accomplishment Records Behaviorally Anchored Rating Scale Field Review Method Performance Comparative Evaluation Test and Observations

Rating Scales

The oldest and most acceptable method for performance evaluation that needs a subjective evaluation of an individuals performance on a scale from low to high. In some cases criteria is quite unrelated to job. Even if the form can be filled up by subordinates but usually it is filled by supervisors to give suitable response for each performance element. These responses are given in numerical form to be compared. This method is quite inexpensive and easy to develop as well as a little training is required to get the form filled from employee. It is also generalized to a large number of employees (Werther and Davis, 1996).

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This method also has some disadvantages. Rater can use biased approach; specific items may be omitted form the form to make it generalizable. This omission results in limited feedback. When a particular criterion is difficult to find, the form may contain irrelevant items and may rely on inappropriate personality attributes that reduces the actual meaning of evaluation (Werther and Davis, 1996).

8.2 Checklist
This method requires the selection of words or statements that describe the employee performance and particular characteristics. The HR department assigns weights to each item according to their importance may be with analysts knowledge, called weighted checklist. These weights are assigned so as to make the results quantitative. This method is standardized but the general statements may reduce its relatedness (Werther and Davis, 1996). The major advantages of this method are it is easy to develop and economical. Disadvantages are biasness of analyst (the halo effect). Despite using performance criteria personality criteria are used, misapprehended items and inappropriate weights assigned by HR department. And also this method does not permit the analyst to give comparative ratings (Werther and Davis, 1996).

Example of weighted performance checklist.

Instructions: check each of the following items that apply to the named employees performance. Employees Name: Department: Raters Name:Date:

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Weights check Here (6.5) .......................... (4.0) 2. Employee keeps workstation or desk well organized. 1. Employee works overtime when asked.

(3.9) 3. Employee cooperatively assists others who need

help. (0.2) 20. Employee listens to others advice but seldom

follows it. .. . . . 100 total of all weights.

8.3 Forced Choice Method

In this method employees are provided with different pairs of statements among which they have to make choices, analyst must ensure that pair of statement must have to be descriptive. Predetermined categories are assigned with codes such as learning abilities, performance and interpersonal relationships. These can be calculated by adding up the number of times the particular category has been selected. Normally the supervisor is rater, the results then shown identify the areas which needs improvements. This approach fits a variety of fields, easy to be developed and lessen the raters bias. But this method has limited use for employees to improve their performance as it is standardized but general statements included are not job related (Werther and Davis, 1996).

For Example:
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Learns quickly. Works hard Work is reliable. Performance is a good example for others Absent too often usually tardy 8.4

Critical Incident Method

In critical incident method, rater has to confirm the statement that clearly illustrates the good or bad behavior as per job performance. These given statements are called critical incidents, provided by the supervisor regarding

each subordinate while evaluating. These incidents are elaborated for what actually happens, further recording and classification of each incident whether positive or negative into categories like control of safety hazards, control of scrap material and employee development (Werther and Davis, 1996). This method is exceptionally advantageous for providing job related feedback. It reduces the biasness of rater through the period of evaluation. It also has some negative aspects as supervisors do not show interest at the end as that was in the beginning, they just add some incidents a little time before the evaluation starts. There should be a supportive case regarding the subjective opinion of supervisors, many employees may feel that rater is just unwilling to cover up their shortcomings that happened a month ago (Werther and Davis, 1996).

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A Critical Incident Record For A Lab Assistant INSTRUCTIONS: In each category below, record specific incidents of employee behavior that were either extremely good or poor. Employees Name: Department: Raters Name: Rating Period of: 1. Control of Safety Hazards Date Date . . . . 2. Control of Material Scrap Date Date . . . . Positive Employee Behavior Negative Employee Behavior Positive Employee Behavior Negative Employee Behavior

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Accomplishment Record

Accomplishment records method is quite similar to critical incident methods that are used by professionals mainly. These are the schedules produced by employees for the record such as publications, speeches, leadership roles and other professional activities. This information is mainly used by the supervisors to create annual reports and shaping raises and promotions and counseling the persons about his or her future performance. The statement may be subjective and items could be biased and include only good things (Werther and Davis, 1996).


Behaviorally Anchored Rating Scales

These scales are a family of evaluation approaches that identify and evaluate employee behavior relevant to job. Specific reference points are used to make evaluation by specific behaviors. To ensure the validity of results bipolar rating scales or forced choice methods are used. The widely using methods are behavioral expectation scales and behavioral observation scale (Werther and Davis, 1996).

Behavioral expectation scale

In this method specific behaviors are used to be helpful for raters. This method is mostly used to reduce biases and subjectivity in approaches for performance evaluation purpose. Job related behaviors are categorized on the basis of information provided by peers and supervisors, job analyst and knowledgeable employees. Specific behaviors are ranked on the sale form 1 to 7. This scale is articulated as employees and supervisors are known. If the rater also helps in conducting accumulating incidents during the rating period, the evaluation will be more precise and legally defensible and more effective counseling mean. It also has a limitation that it only identifies specific behaviors as most supervisors are reluctant to record particular incidents that cause reduction in the effectiveness of the results (Werther and Davis, 1996).

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Behavioral expectation rating scale for:

Performance Category: Extremely Outstanding Performance Good Performance Fairly Good Performance Acceptable Performance Fairly Poor Performance Poor Performance Extremely Poor Performance 7 6 5 4 3 2 1

Behavioral observation scale

In this method specific items are used to report frequency of those behaviors. This scale is mainly concerned with good to bad performance. These behaviors are mainly measured along five point scale from almost never to almost always. This method reduces personality disputes, advance feedback between raters and workers (Werther and Davis, 1996). These methods are more critical to develop and administer as they deal with specific behaviors whose validity is considered to be more justifiable. This feature makes them more costly and consumes a more time to get developed (Werther and Davis, 1996). 36 GROUP H MBA 3rd M1

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Q No. 1

you can expect this to help customers in need. Almost never

almost always 1 5 Q No. 2 fights. Almost never almost always 1 5 8.7 2 3 4 you can expect to calm down arguments before they erupt anti 2 3 4

Field Review Method

Each time subjective measures cause bias in raters perception, to avoid such thing and to provide standardize results field review method is preferably used by the organizations. A specialized person provided by HR department directly goes in to the fields a help out supervisors to get immediate information about employees performance and then prepares evaluation on the basis of provided information. This evaluation is sent to the supervisors who will then review, change and approves such evaluation and then any particular type of rating is applied to it by the expert. As the evaluation is conducted by expert its reliability and comparability is ensured and hence bias is reduced since it is costly and

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impractical for the organization. But the primary source of data collection is supervisor; bias is likely to be take place (Werther and Davis, 1996).


Performance Test and Observations

These tests are conducted when organizations rely for compensations, reward system for employees on pay for knowledge or pay for skill approach. This may be paper pencil test or demonstration of particular knowledge or skills. The test is most appropriate for measuring potential performance as it must be reliable and validated. If the cost of development and administration of test is high it would be impractical for the organization (Werther and Davis, 1996).


Comparative Evaluation Approaches

This approach is collection of different methods for conducting comparative appraisals of different workers for deciding promotions, rewards, merit pay increases. These methods compare performance of workers from best to worst. These methods are based on subjective approach and may subject to bias since they are practical and standardized (Werther and Davis, 1996). The most commonly used methods are; Ranking Method Point Allocation Method Forced Distribution Paired Comparisons


Ranking Methods

In this method each employee s ranked from best to worst. HR department have knowledge about employees who are best but do not know the degree of differentiation. This method gives halo and leniency effect. The rankings provided by two or more raters are averaged to reduce biases and hence is easy to administer and develop (Werther and Davis, 1996).

8.9.2 Forced Distribution Method

In this method employees are classified with specific proportions into different categories b raters. It used to measure over all performance but also used for other criteria. Under this method differences among employee performances are 38 GROUP H MBA 3rd M1

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not measured but helps in reducing biases of central tendency, leniency and strictness errors (Werther and Davis, 1996).

FORCED DISTRIBUTION METHOD OF APPRAISALS Classification of overall performance Best 10% of lowest 10% of Subordinates subordinate subordinates subordinates subordinates next 20% of middle 40% of next 20% of

8.9.3 Point Allocation Method

In this method rater gives fixed number of points to employees in a group on the basis of their performance. Good performers with high points and bad performers with less. Rater can identify the differences in performance of each employee but still halo effect and leniency bias takes place (Werther and Davis, 1996).


17 14 13

Mr. A Mr. B Mr. C

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. 5 100 Mr. Z

8.8.4 Paired Comparison Rater compares employees with all other employees with in a same group on the basis of over all performance. The most of the number an employee is rated high it can be added on to develop an index and it will be considered as best on the criteria selected (Werther and Davis, 1996).


Future-Oriented Appraisals

By evaluating an employees potential or setting future performance goals Futureoriented appraisals focus on future performance. Following are the general approach to estimate future performance (Werther and Davis, 1996).



When the objective of estimation is to further self-development, self-appraisal will be a helpful evaluating method. The chances of happening suspicious behavior are less expected and self-development is more, when employees evaluate themselves. Self appraisals are helpful for users in future for personal goal setting. The only threat is that the employee will be too relaxed as well as serious of their performance. In any evaluation approach, past or future-oriented self-appraisals will used. The employees participation and dedication to the development procedure is the important element of self-appraisals (Werther and Davis, 1996).


Management by Objectives

The important part of management by objective approach is goals. Goals are measureable and on which manager or employee are equally agreed. When employee take participate in their goal setting, the expectation is that to 40 GROUP H MBA 3rd M1

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accomplish those goal they will motivated. For the accomplishment of objectives employee adjust their performance accordingly. For continuous effort, employees must timely receive performance feedback. Objectives help the supervisor and employee for the making of future training and progress efforts which are more related to the employee. After that performance conversation focus on the job objectives. Partiality is reduced to the extent that goal accomplishment can be measured neutrally. Management by objective approach has faced some difficulties, in practice. Sometimes Objectives are motivated as well as small or are set without discussion but forced by the supervisor. So the result is irritated employees and their performance area also ignored (Werther and Davis, 1996).


Psychological Appraisals

Industrial psychologists are paid in some institutes on permanent or contract basis for evaluation. Psychologists evaluate an individuals future prospective on present performance. Usually estimation consists of in detail interviews, negotiations with supervisors, Psychological tests, and analysis of other estimation. Employees rational, emotional, motivational, and other professional characteristics that are related to persons potential are then inscribe estimation and may predict performance by psychologists. The evaluation of a person by the psychologists may relate to an individual being considered to the opportunity of particular job, or may be Individuals future prospective evaluation internationally. For a persons job position and improvement decisions are important. As this approach is slow and expensive so, generally it is kept for brilliant managers or for managerial level decisions within the organization that have substantial potential. Abilities of the psychologists consider important for the quality of these appraisals (Werther and Davis, 1996).


Assessment Centers

Assessment centers are used for evaluating potential but these results cannot be made on the results of one psychologist. Multiple users and type of evaluation are depending on assessment centers those are form of standardized employee appraisals. They are implemented on the managers who have potential to perform well with more responsibility. Group members first time meet at a training facility or restaurants, and there they evaluated individually. In this process employees are passed through interviews, psychological test , background investigate , evaluation by peers, leaderless group discussions, evaluation and rating by managers psychologists and simulation work to make evaluation on potential in work simulation normally in baskets exercise decision making exercise computer base games relevant to job and other relevant activates. During the whole span 41 GROUP H MBA 3rd M1

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assessors make judgment about strengths, weaknesses and potential in each employee. This process is quit costly for the company as they have to pay to the assessors who are usually managers and also paying for the candidates. Organization are also providing big psychologist along with managers to increase validity of test and exercises practices. There is also a problem that the procedures fallowed are whether objective or subjective because biasness also effects the results. A report is prepared on the results that will help in development of management and for placements decisions. This information also helps HR department for HR planning and other related decisions. The result provided under this method becomes good predictors of job performance (Werther and Davis, 1996). 10.

Implications of the Appraisals Process

Good practices are necessary for a successful performance structure. Multiple raters, peers and viewpoints are used which might present better estimation and reduce biases. Support and participation of management is important for successful assessment. For understanding and support, preparation and interviews are required (Werther and Davis, 1996).


Training Raters and Evaluators

Whether a complicated assessment center or a simple relative technique is used, the evaluators Must have understanding about the system and its purpose. The raters evaluation might change by knowing about the appraisal whether it is to be used for assignment or for compensation, because for different customers different criteria might weighted. Reliability of estimation and assessor understanding are main problems. Strategies for raters with response or for conducting the evaluation are offered by HR department. In big companies, through training knowledge gap solved. For the explanation of the reason of practice, the mechanics of how to do it, partiality or difficulty, and answer of the questions to the rater training workshops are generally planned. [The training may include trail runs evaluating other classmates to gain some supervised experience]. In the estimation practice, to give the rater both understanding with and insight some companies used roleplaying and videotapes evaluation meetings. Scheduling and timing of evaluations are discussed in the training. Near the individuals employment anniversary, many companies do official assessment yearly. The assessment practice can begin, if evaluators are qualified. The results of the evaluations do slight to progress performance if the employees get response (Werther and Davis, 1996).

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Evaluation Interviews

It is the session of performance evaluation that gives employees necessary response regarding their future prospective and past performance. Usually, classification of particular behaviors to be reinforced in the evaluation interview, an evaluation of earlier assessment, and an approach that is used in giving response are included in it (Werther and Davis, 1996). Feedback may provide by the assessor through several approaches: Tell and sell Tell and listen Problem solving

The tell and sell method tries to influence the employee to improve the performance and evaluate the employees presentation. With new employees it works best. The tell and listen approach permit the employee give justifications, to elucidate causes, and explain suspicious thoughts about performance. Through analysis the responses of the employee on how to present better can be overcome in this approach. The method of problem-solving recognizes problems that

are interfering with the performance of employee. After that, objectives for
future performance are set to remove the insufficiencies through training, coaching, or counseling. In spite of which method is used to give employees response, the course of action helps to make the session of Performance evaluation most valuable. By pressuring the attractive characteristic of employee performance, transformed self-assurance can give to the employee by the assessor in their aptitude to perform adequately. In viewpoint these optimistic approaches also allow the employee to stay attractive and unattractive performance because it prevents the employee from emotion that the sessions of performance evaluation are completely negative. Employees focus on job performance, when negative comments are made. By focusing on events that the employee may take to progress areas of poor performance the evaluation conference is concluded. In the final conversation, whatever helps the employee wants to overcome those insufficiencies the assessor generally offers to provide.

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The manager should monitor employee performance, after the evaluation session. Though, the stress should be on helping the employee in the post performance assessment to achieve their goals of performance improvement. Manager wants to offer opportunities to improve employee performance and should arranged additional training or other agreed on support (Werther and Davis, 1996).


Strategies for Effective Performance Appraisal Systems

Constructive tackles used for assessing the job of human resources and encouraging these human resources are Performance appraisals. Regrettably, at the same time these performance appraisals reciprocally for administrator plus worker are an incredible cause of unease and dissatisfaction. The doubts and vagueness are the central grounds at the back of restlessness and disappointment that envelop several performance appraisal structures. On the whole, performance evaluation is a technique used to facilitate human resources to administer their own performance, furthermore can be considered like an approach towards the authentication that whether individuals have been meeting located standards or not (P. Anthony et al, 1993). Differentiation among immense and little performance is objective of every performance evaluation structure. But implementation of this is not as simple as it looks like. While implementing performance appraisals basic hindrances in the way of target of differentiation are; Controller having a complicated time while evaluating a worker unsuccessfully, Rating scale that have a tendency to amount each and every one worker jointly in the center plus traditions that prize prolonged existence as an alternative of performance number of benefits can be achieved by the organization through the application of performance appraisals system. For example, deserving work performances can be identified accurately and rewarded appropriately, pessimistic approach of both administrator and human resources which they normally hold can be lessen by implementing well planned appraisal structure. By creating strategies for effectual performance assessment this can be done profitably. Here we will scrutinize the function of performance evaluation in human resource administration and the association between performance appraisals and the strategy of the organization (P. Anthony et al, 1993). Different strategies can be used on the subject of performance appraisal system. Several vital preferences are sketched along these lines; What is the intention and aim of the organization for using performance appraisals? Also assessment will be conducted for the purpose of shaping incentives, handling troubles or else intended for some supplementary reasons? 44 GROUP H MBA 3rd M1

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And whether assessment will be conducted on the basis of collective efforts or of individuals? The entire of these must determined by manager (P. Anthony et al, 1993). Used for performance appraisals formal and informal procedures are accessible, manager can select among these. Formal: where assessment is planned and takes place by definite time stage Informal: where manager and assistants talk about troubles along with solutions by the occasion as they take place. In opposition to subjectivity Performance appraisal systems are capable to call attention towards more objectivity. (I-e) Manager should assess subordinates on the basis of their own judgment? Or assessment should be made on the basis of solid reasons like; non-attendance or quantity of items created? Etc (P. Anthony et al, 1993). Yearly appraisals are being performed in the organizations. Managers have to decide about the frequency of performance appraisal system used inside the organization. A lesser amount of regular proper analysis may perhaps be carried out among fresh work procedures where performance response is specified on per month, day by day or even per hour basis. But if employment is not providing particular response regarding performance; a year is a lengthy gap linking reviews. Who is going to conduct performance assessment? Is that person will be a supervisor (frequently selected) or some one else? Managers also have to answer these questions (P. Anthony et al, 1993). 11.1

Objectives for performance appraisals

Performance appraisals system is used to find out the employees, who deserve promotion, who should be downgraded, relocated or expired from job. Along with these there are also many other human resource tasks which are interrelated with performance appraisals (P. Anthony et al, 1993). Lets take an example; an organization is planning to provide their employees with the opportunities for formal training and development. Here organization has to decide that who needs training and who deserves further development, so organization can conduct performance appraisals and can use the results for making decisions regarding these questions. Organization can also use such opportunities as prize for those who presented cheering end result from evaluation. Development opportunities so as to employ as prize or reward for efficient performance can be provided in tow forms (P. Anthony et al, 1993). 45 GROUP H MBA 3rd M1

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Creation of stimulation, enthusiasm and enhanced performance is also an objective of performance appraisals. Through performance assessment an individual can be make aware of his or her strong points as well as flaws where he or she require perfection and then assessor can assist him to focus the track that will generate the most constructive reimburse. In return of these highlighted performance that created strong and affirmative outcomes the individuals must be encouraged to carry on performing in this way (P. Anthony et al, 1993). A well designed appraisals system can help if an organization needs to persuade the individuals to work collectively as a team. Numerous challenges will build barriers in designing and executing such system as conventional performance appraisals systems designed for individuals are no longer applicable. For the reason that application of individuals based appraisal systems can discourage the efforts of whole team as these appraisals are for individuals who perform highly interdependent tasks. So Instead of individual systems, peer force might be satisfactory towards the motivation of team members to perform. The evaluation process can be conducted through self managed group where members can evaluate each others work instead of evaluation made by supervisors. The procedure possibly will require to be redecorated, as self managed teams demand an exclusive approach to performance appraisals (P. Anthony et al, 1993).


Formal versus informal performance appraisals

Organizations call for formal performance appraisals for the assessment of employees performance which typically come about at particular events like on one occasion otherwise twofold in a year. On the other hand whenever the superintendent supposes that it is the time to be in contact he can call for an 46 GROUP H MBA 3rd M1

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informal performance appraisal. Informal performance appraisal can take place at times, such as; an employee is showing consistency in his performance to achieve organizations standards and beyond these standards, so simply with the intention of distinguishing this piece of information informal appraisals can be arranged. Obviously, for all time it is considered smart, to make concealed talk about a workers performance and negotiations can be made at different places inside the organization as office of the manager or cafeteria. Mostly organizations seem to favor in applying formal and informal appraisal system combined. Formal appraisal system is considered as the primary evaluation although for more frequent performance feedback informal appraisals are very helpful. Informal evaluation is supposed to not capture the tie of a formal performance assessment (P. Anthony et al, 1993).


Objective Vs. subjective performance appraisals

Objective performance appraisals are for evaluating performance against specific standards while as subjective performance appraisals are for evaluating how well an employee performs in general. The degree of opposition from objective performance evaluation to subjective performance evaluation must be decided by the organization. For an organization objective procedures are the superlative tactical preferences and at the time of recognition of required characteristics that are problematical to measure subjective procedures prove to be helpful. Because communication proficiency or supervision potential can not be assessed objectively so both the objective and subjective measures of performance should be enclosed in the formal performance appraisals. Approved performance principles stand on a throughout job analysis must take in Job requirements and performance evaluation should be based on these Job requirements. As of a purposeful sight, for an organization frequently it is greatest to promote objectivity in the formal appraisals procedure, like, performance instead of outlook must be measured while rating the human resources. From a legal point of view, objective procedures are straightforward to protect moreover vagueness for human resources and supervisors can be shrinking because of this. While developing the performance appraisals format organization should weight the expenditure and reimbursement from these formats. Because many performance assessment scales are tremendously prolonged and costly to build up (P. Anthony et al, 1993). 11.4

Frequency of performance appraisals

Normally performance appraisals for employees are conducted after 6 months or a year. Managers negative observation of the procedure leads to lots of repeated performance appraisals. Particularly at the time when performance of employees is below expectations, frequent performance appraisals can be stressful for both 47 GROUP H MBA 3rd M1

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employees and managers, moreover some manager consider performance appraisals as extra work and wastage of time. That could be the reasons for manager to avoid the situation. Rather performance appraisals should be considered as a way to improve performance and to develop employees and managers should be encouraged and trained to view the process as an opportunity to communicate with their employees (P. Anthony et al, 1993). Interesting thing is that, Instead of formal, informal evaluation is more popular in employees. Observations show that employees suppose to be evaluated and given feedback more then once or two times a year, for 80% employees one of their top five priorities is rank feedback in response to their performance and only 45% are satisfied with the feedback they receive. The unease of employees linked with formal evaluation can be reduced by decreasing surprises regarding activities which are not declared but acknowledged long prior to the conference. Strategies which organizations can use are the Limitation of strict and more laborconcentrated conferences toward one or tow every year and promotion of repeated informal appraisal conferences between manager and employees. Under this approach, Goals and objectives for the upcoming track can be established in meeting of employee and supervisor at the beginning of the year. And so at the end of the year formal evaluation became not as much of stressful for both parties because of the repeated feedback that has take place throughout the year (P. Anthony et al, 1993).

11.5 Types of performance appraisal methods

Several performance appraisal designs are accessible for use. Some focus on worker behaviors while others are result oriented. In the report we have already discussed many of the past and future oriented performance appraisal methods. These performance appraisal systems include several types of behavioral and result oriented methods e.g. rating scales, critical incident method, behaviorally anchored rating scale, management by objective (MBO), etc (P. Anthony et al, 1993).

11.5.1 Selecting a performance appraisal method

None of the performance appraisal system could be supposed as a perfect or best method for all situations. On the basis of the circumstances some methods can perform better then others. For instance, MBO is a good approach to use if performance information available is of objective nature. And while making the comparison of employees performance to determine promotions and so on, some of the common denominators should be determined. Here performance is rated numerically so rating or ranking methods should be preferred over MBO. A performance appraisal system must be lawfully justifiable. As no appraisal system 48 GROUP H MBA 3rd M1

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can be guaranteed as safe, so supervisors must be alert of the consequences of court cases that made judgment regarding the performance assessment procedure. For different cases, whether objective or subjective measures are appropriate for job under consideration will be decided by the court. While selecting a performance appraisal system it must be well thought-out that whether the system will be able to manage the sorts of rater errors that are typically come across (P. Anthony et al, 1993). 11.5.2

Tips for developing a legally defensible performance appraisal system

There is no guarantee for any appraisal system to be safe. But on the basis of several court cases outcomes, centered with performance appraisal, following way is suggested to create a legally defensible performance appraisal system (P. Anthony et al, 1993).

Start with the job analysis that will establish the indispensable uniqueness intended for victorious job performance. Then establish the performance standards from the results of job analysis. The employees who will be evaluated should be aware of these standards and should also accept them. A rating scheme should be developed on the basis of these standards, which should measure undoubtedly distinct individual components of the job performance, and then these standards and rating scheme should be supplied to each and every one rater. Scale selected may not be considerable from legal perspective but for using trait rating or simple graphic rating scale no problem is indicated by the government. While using these types of methods, intangible quality names and to fasten the scale with to the point understandably regular labels must be avoided. Raters should be trained for using the scale in the correct way. While making the decisions the way of applying standards must be focused. And standards should be applied uniformly. Appealing the rating, directly to upper level management, must include a mechanism. Documentation of all appraisals should be made as it is very valuable in court cases.

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Poor performers should be directed to the right way. Court rules more positively towards the organization at what time when organization tries to help the poor performers (P. Anthony et al, 1993).

11.6 Strategy and the performance appraisal process

The performance appraisal system is used for recognizing employees with potential; rewarding performance justifiably and determining employees requirements for improvement so to scientifically push the high levels of performance. All these tricks should support the organizations strategic direction and in this way performance appraisal system can be employed to promote a variety of organizational targets and objectives (P. Anthony et al, 1993).

11.6.1 Organizational strategy

The managerial efficiency can be enhanced by strengthening the relationship between the performance appraisal system and organizations long term strategy plan. This linkage will help to construct a culture that will further strengthen the organizations strategy. There is a better possibility for both the organizations and employees targets to be gathered, if the system is intended to help employees direct rather account their performances. Under economizing strategy crucial concentration is dedicated towards improving the effectiveness of existing operations at this point performance appraisals can be used as way of categorizing training requirements and of skill building. While at the other side under growth strategy searching for opportunity markets and new product lines is familiar here the focus is on identifying staffing needs as opposed to training needs (P. Anthony et al, 1993).

Common problems with unsuccessful performance appraisal system

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Criteria for a successful performance appraisal system

Adapted from Human Resource Management: A strategic approach (P.Anthony et al, 1998).

Developing performance improvement plans

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The Changing Nature of Workplace

Body of work is marked by continuous change. Continuous changes have seen in last some decennium in organizations mode. Organizations and functioning modes which were intimated during last some years are encountering some genuine durable appraisal.1970s was still, feasible, the period of productiveness, intimating the edge of synthesizing on any proportion in UK, and certain aspects were common in organizations of the time. They were large corporation with charge and authority administration behavior. Working class adaptability was defined and generally was upright amalgamation. Configuration was based on the contrasting of working class, a basic alliance of management broad pyramid of supervisors and organizers, functioning in distant duty alternations. In 1980s, probably broad organizations aimed to be decentralized and actualize autonomous business assemblages. These generally accomplished as confined fiefdoms and accumulating a collaborative progress could be burdensome. The confrontation for HR at the basic was to affirm appraisal reckon. Working force adaptability was rather low (Holbeche, 1999). The 1990s have been typified by inadequate, leaner organizations with active textures and delayer management. These managements are charge less, more adjustable and engaged. However, these anatomies are just another style of management to achieve control over working class through attitudinal rearrangements (Holbeche, 1999). Control methods have been redesigned and cooperative connections are developed with suppliers. Team working, overall affirmation aspect, parallel amalgamation and working force compliance are also common of the time. Some scholars have defined it as a post revamp age which embodies the deadline of broad authoritative production revamp stage. Through utilization of automation, progress achieved and deskilling express just a reworking of revamps producing ways (Holbeche, 1999). The modern golden age is known to be the inception of active age or rapid production, where working class adaptability will be eminent and employees will be cautiously managing their own jobs. Organizations will target their own basic abilities, rather than just their accustomed development. Except being an affix a staff, then organization will be a charge familiarize
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elemental anatomy. It is generally to be defined by a small basic centre and accord with suppliers and clients. The elastic and the colloquial will need to accompany with officials, amalgamation gadgets. The threat here will be to developed organization, thus delayer, which are wholly affiliated and harmonized, and where employees experience elevate level of assistance and charge (Holbeche, 1999). Forge anatomies have now became well-developed amalgamation devices. At variance with in region where there is acute contention, like economical assistance or the considerate commerce, trend toward integration, through amalgamation and acquisitions, former to dissemination or demerger, seems
well-embedded (Holbeche, 1999).

12.2 The Role of HR in creating integration

If the trend is approaching amalgamation but active anatomy, HR has less imp role to play in empowering this amalgamation. The HR dept. itself will be an amalgamated structure since its dispatch often performed beyond organization limitations and usually bear charge for collaborative articulation. The internalization of collective assessment, through chief programs and the organizational accomplishment wholly, are considerable causes of integration (Holbeche, 1999).

12.3 High Performance Work Practices

A lot of studies have shown the considerable economic benefits of implementing and adopting high-commitment or exceptional performance at work in comparison to old scientific management which was common among modernist organizations. Generally defined as Japanese management activities, the scenario for adopting such approaches is powerful and strong. MIT investigation of the whole worlds motor vehicle construction companies, reported in the book the Machine that change the world by Womack (Holbeche, 1999). All the assembling plants which have implemented in cost-effective manufacturing methods and interlinked employment-relation ways in successfully using mass production methods. Other searches based on
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textile industry have proved that all those organizations that prefer team working, motivation, training and skilling for varied job faced 22% increment in G.P margin b/w 1988-1992 comparatively to other similar companies (Holbeche, 1999). An effect of devoted work practices using ways of financial performances has been implored. Then the results were produced showing, increment of sales over $27,000 per employee annually, aftermath of increase in motivation and high-commitment work practices. One amazing thing which was noticed that effectiveness does not resulted due to change in any of firms strategies but gradually led to increment in overall performances (Holbeche, 1999).

These high-commitment work practices are figured out by the following: 1.) Suggestion groups, quality control groups, employees intervention ideas for development. 2.) Freedom of suggestion. 3.) Job rotation, enrichment, enlargement to take best benefits of skills.








companies like Motorola, Levi Strauss etc use these approaches. The theory they adopt enables the employees to interlink with each other, which motivates them and help to achieve coordinative objective. Corporate values can prominent the reward policies. Profit-related pay and ownershipsharing are some other most important element of motivation. Communication effectiveness also depends on the person conveying the message and his behavior than just words. Though these practices have shown off effectiveness but still they are spreading slowly. The main barrier occurring is the typical conventional concept of focusing more on strategically and financial aspects rather than on employees and their
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relations. As these high-commitment performances demand a huge investment for training, motivation etc, so many organizations are reluctant to invest in it because of their certain cost-effectiveness. Manager prospective about his duty, employees interference and way of thinking can be effected. If managers would just consider their ideas about organizations and would take their own decisions that how day-to-day thing should be done, they wont consider the ideas of those people on which certainly organizational success depends on, mostly low level employees (Holbeche, 1999). Management and authority problems can also be a barrier in way of implementing work practices. Managers wont wish to re implement previously failed strategies. Similarly, middle managers who are basically most affected are redundant to adopt any new work practices. Mostly the advocates of adopting changing work practices, usually HR professionals have low salaries comparatively to those of basic critics of such changes, often finance directors. Interestingly, a study showed that in Japan the changes adaptation means HR and manufacturing department were paid highest level of salaries (Holbeche, 1999).

12.4 How can HR help to implement high-performance work practices?

12.4.1 By creating a culture which is supportive of high performance: High performance only occurs when opportunities and motivation are given. The organization should be productive and reactive in quality improvement. A South African construction company, Neil Muller (pvt) Ltd, has managed to maintain and improve productivity by making a cultural change to aid and support improvement. Management introduced, which came to be known as Total Company Rejuvenation, to renew the numbers of affected and problematic areas, mostly related to HR, i.e.
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Trade unions work is not positive No relation b/w management and employees. Lack of trust b/w management and workforce. Limited monitoring of productivity on-site. No long-term planning. Less involvement of employees in planning and discussion. Less effective supervision on site. Etc.

Noticeably, company assured job security and career path as basic of quality improvement plan. Another step was developing trust and improving communication b/w management and workforce. Ten goals were setup including workers participation and introducing profit-sharing schemes. Training played important role in gaining high skill level. All companys workers daily attend 2 hours training session. Workshops were held for senior staff. Moreover work targets were introduced. A committee was setup with name Unity forum for creating new levels of trust and communication B/w Companys management and workers (Holbeche, 1999).


By influencing attitudes

HR can aid setting up benchmarking visits to the organizations who are showing some outstanding performances and results, then they can implement and practice the same strategies used by other successful organizations and one of HR team should be setup to make cost-benefit analysis and noticing employees interest and attitudes towards the change (Holbeche, 1999).

12.4.3 By designing and implementing HR processes which support the business strategy
Practically, to develop high performance, HR ways of rewarding are needed to 56 GROUP H MBA 3rd M1

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interlink the new ways of working. The below HR processes are common among front line companies: - Employees selected by considering most abilities. - Skill development and training programs. - Share ownership with employees. - Providing job security. - Motivate staff by acknowledging their task etc (Holbeche, 1999).


Reward strategies

Relationship b/w performance and reward has been considered since long and since 1990s changes have been made in reward management system. Pay system should be revised especially in the competitive market. Many organizations have responded to competition by producing according to consumer needs and tried to secure product and business loyalty. When team-work is implemented, evaluating employees individually become quite impossible. Experiences and skills are then taken in account of all employees wholly; in this case ones bottom line performance cannot be taken in account while determining pay. Job promotion and security has now became things of past, which are not practiced as a part of reward system as before. This make some employees less effected and motivated as now their rewards are just confined to materialistic goods like bonuses etc but not a desirable job security, progression etc (Holbeche, 1999).

12.5.1 The symbolic power of reward system

Reward systems should fulfill both aims, i.e. there must be rewarded employee for their highperformance and must be managed salary bill most appropriately. Different ways can be adopted for motivation, they can be admired at good work, increasing sales etc. Team-work must be preferred but reward system on individual bases should be implemented. Reward systems can be in form of bonuses, performancerelated pay, fringe benefits etc, but mostly organizers think that money is a best motivator, by which Hertzberg has not actually agreed. When employees get pay 57 GROUP H MBA 3rd M1

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increment offer or bonuses on outstanding performance, it would seem him as the most motivating factor but once he realized that his co-workers are getting pay higher than him and once his job get delayer and form team-work, the same money could act as a best demotivater (Holbeche, 1999).


The need to revise reward strategies

In past some pay schemes were implemented according to hierarchal structure of organizations, pay were same at the same grade and get change with seniority. In last few decades this system has been changed. Employees are paid according to their performances rather than just job grade. In flatter structure of organizations promotion is les and pays are mostly dependent on performances and in some of these organizations promotion just depends on skills and experience. When people are satisfied with their jobs and working conditions they dont bother to overview reward system as an issue. Few HR professionals do know the best ways to reshape rewarding ways but problem occur in knowing that which part needs changes and what organization is aiming to reward. At the same time investing successfully for development of new reward system need full commitment and experience (Holbeche, 1999).


Performance-related pay

for motivation, performance-related pay and incentives schemes are preferred from long time. Different govt. are overlooking the issue of extending incentive schemes to a wider group of employees, rather than just those who already get bonuses, like professors etc. Many organizations prefer these sorts of schemes as they think it as the best way to recognize individual performances; however a few oppose it with the thought that it only favors short-term performances. Many of them believe that colleagues become against of each other just because of three types of scheme. Organizations are demanding much more from employees in terms of best performance against producing best output, certainly they are emphasizing more on best input in form of skilled people and best usage of technology. They want staff to be more competent and skillful. Some organizations only consider output for rewarding while few also prefer input, like team-working, creative suggestions and demonstrating leadership etc (Holbeche, 1999). 58 GROUP H MBA 3rd M1

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12.7 What reward strategies are appropriate in changing organizations?

If organizations bring more flexibility in work practices, they may also have to make reward system flexible. This will still depend on appraisal difference due to skill progression, but system would have to be careful about cost. The main challenge is to find alternative systems which allow best work according to organizational needs and limits with work-forces motivation. In delayer organizations efficiency-based pay structures are becoming less frequent; however flatter structures have increased the job responsibilities. Mobile work-force requires most benefits at their place. People working on different sites are paid indifferently. Many European countries are putting pressure on employers to provide basic benefit programs, like pensions etc. Competitiveness in the market directly depends on employers thinking and his bets us of compensation packages to attract best talent (Holbeche, 1999).


Long-term incentives and share ownership

The use of long-term incentives are becoming more frequent, countries like USA are popular in utilizing incentives for retaining important workers. In particularly UK where such schemes are generally lower, trend has developed in MNCs, like Shell and Total, of extending these incentive to other senior employees in Europe. Ownership sharing also seems to be on increase. Many companies are also offering share option to motivate employees (Holbeche, 1999).

12.7.2 Broad-banding
Salary range scale is fixed and all the employees working on same level are given same salaries according to their efficiency and commitment in the same range (Holbeche, 1999).

12.7.3 Other trends

In many organizations employees are paid according to their experience, some 59 GROUP H MBA 3rd M1

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of them are first given training and when employee get enough skills pays are increased, Team base pay is also preferred but in that case disagreements are more often. If targets are achieved most desirably incentives are given in form of cash and shares as well. Job families reflect the need of different workers, but for organizations it is difficult to compensate to the basis of Job families (Holbeche, 1999).

12.7.4 Flexible benefits

One of the most important things is that either the benefits are perceived as valued or not by the employees. In UK, Cable and Wireless developed a cafeteria-style benefit system. This scheme involves items like pension, healthcare, life insurance etc. In USA, some companies such as Lotus Development and Apple Computers are extending benefits to domestic employees and to their spouses. Hoechst Russell was formed due to merge of 2 pharmaceutical companies; its team ran a staff according to what employees really want. Different employers and managers have different perceptions of benefits and rewards to bestow, some prefer cash and ownership-sharing while other prefer job-promotion. Benefits can cause further efficiency, but it depends on the relevancy and value. Hence some successful managers think that benefits should equally be considered and relevant to organizations goal (Holbeche, 1999).


How do people wanted to be rewarded?

Reward can have different forms:

Fringe benefits Profit-sharing Long-term incentives

Bonuses etc.
Few HR employees think that job satisfaction is more equally important as fringe benefits. Most employees want their contribution and skills to be recognized. They enjoy respect and admiration (Holbeche, 1999).

12.8.1 Recognition

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Recognition schemes has special value, it is one of the best way of motivating behaviors. Few researches suggest that these schemes are not helpful in long run but it is also true that if these researches are regularly modified they can be desirably fruitful (Holbeche, 1999).

12.8.2 Supporting cultural change through a reward and recognition process

7. TQM process in company requires continuous improvement in organizations culture. An Australian Pharmaceutical company is operating its rewarding schemes most effectively. It is making continuous improvement by making following types of contributions: Exceptional team-work, High-commitment etc. Individuals on the bases of attitude of quality, devotion, commitment, enthusiasm etc are chosen for activities which lead to improvement in environment of organization, best of them are nominated and are reviewed quarterly and are rewarded by certificates, packages, group photographs for publications etc. Quarterly winners are also selected and are certified for Annual Quality Awards. It does not only build confidence but is also supportive and can be the best long-term and short-term element of motivation (Holbeche, 1999).

8. 12.9 Developing performance improvement plans concluded

In obtaining high-performance HR plays the most important role. HRs interaction with line managers can shape best organizations and work structures. HR has to cooperate with other management staff to move forward. It can change the way in which people work, their pays and desirable result require by organizations. Pay is the only factor which can build and demotivates team-work, performances and commitment at the same time. There should be a strong link b/w what is to be done and what is expected, and what is paid for. Employees suggestions should 61 GROUP H MBA 3rd M1

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be considered flexibility. Best way of competition could be when there is no jealousy b/w co-workers, but of cooperation positive feeling o which can motivate them. When employees feel being valued and admired they become confident and prove to be beneficial for aligned results in the form of efficiency and highdesirable result (Holbeche, 1999).


Models of performance management

13.1 Integrated performance management model

Organizations used huge amount of efforts in term of time & money in order to motivate employees and maximum utilization of human potentials for the sake of performance management. Some research studies referred that most of these efforts got fail to produce expected results were not find to be much effective and unluckily steps taken by HR management initially were abrupt and efforts were mislead and were not streamlined (R. Kundula, 2004). Integration of performance management techniques with specified objective of an organization in parallel to strategic planning can be effective to: Diminish negative results. Take part in increasing efficiency of an org.

The model of integrated perform once management was created, developed, implemented and evaluated by Les Pickett, president elected of ARTDO and president of HR international, Australia can be the best example and provide the basis. This model received great appreciation due to its relativity of action to its outcome. While it was presented at 25th annual international symposium o personnel administration held in 2000 (R. Kundula, 2004).

Integrated performance management; an Overview

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Mission Statement

Corporate Object

Core Competencies for Organization

Key Performance Indicators

Business Strategies

Organization Structure

Managerial and specialist competency

Position Description

Individual Objectives

Action Plans

Performance Review

Individual Competence Review And Gap

Succession Planning

Individual Development Plans

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Staff Training, Managerial Skills And Executive Development Program

Recognition, Reward And Remuneration

The chart of integrated performance management model refers that there must be: 1. Recognition of unified objection that should give us a proper sketch for identification of performance goals and inspect the achievements with respect to defined objectives.


On the basis of competency of employees, every employee must contribute

individually in making and implementing developmental plans


A logical flow and integration in the performance management

This model prohibits implementing performance management initiatives at individual format so that to deduce productive results for employees and organization as will to review the performance and to appraise it, the evaluation of activities disjointedly can be serve as effective tool but can never g be able to provide a strengthened performance management system (R. Kundula, 2004).

Management implication:
The performance management of employees is the backbone and serves as core of human resource management. The model provided HR managers with various proposals, solutions and practical implementations that can keep them in creating an outline of steps of a model which suits and can be relevant to the goals and objectives of an organization and cultural values of it. There are two considerable elements that can be important in order to attempt and create an unusually good model of performance management. First, we need to know about the fail that performance management consist of various steps that begin from the recognition of united objectives to mix rely the development of employees skills and capabilities and find in useful purpose of these objectives. Secondly, organization must define clear goals, direction and plans of implementation that how to carryout performance management system plus these activities must not be implemented at individual format (R. Kundula, 2004). 64 GROUP H MBA 3rd M1

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for high performance management

Many organizations and their human resource managers have come to the point that there is no difference between performance management practices and high performance of employee. But there remains a confusion that, with what constituents practices of high performance management is made up of. Different experts of different school of thoughts have recommended different methods of to acquire high performance management these methods and steps should be:

Customer satisfaction oriented Continuous improvement of organizational process oriented Profit/turnover/sale based and Stakeholders focused.

With the harmony of ideas of experts belong to different schools of thought formulated many different HR practices. All these practices are different in nature although, yet produce sale results . Selecting the right steps to create a perfect mix of HR practices has made the job and responsibilities of HR managers more complicated in this regard U.S department of labor solved the confusion of HR managers significantly, they have studies numerous HR practices in different organizations very carefully and formulated many high PM practices. Out of all practices U.S department of labor categorized these following seven practices as resultant of high PM practices (R. Kundula, 2004).

Leadership and support from top levels of management

This HR practice includes the following instructions for high management: Top manages should create an environment of trust inside the organization where changer are accepted and here is encouragement for innovation and risk taking in addition to encouragement these behaviors are rewarded materially.

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Managers and employees develop a vision for their organization with joint efforts that at what level they want to see their organization in future. A supportive environment must be created where mistakes are absorbed and any delay in progress caused by any reason which cannot be ignored normally is tolerated (R. Kundula, 2004).

Strategic planning
Employees involvement must be ensured in formulating those steps which can be helpful in achieving these strategic goals of organization and reviewing the plans constantly (R. Kundula, 2004).

Continuous development of employees

As far as the practices of training and development are concerned, every employee from any post from top ranking to the bottom must lie in this umbrella both individually and collectively (R. Kundula, 2004).

Focus on the customer

The ultimate goal of HR managers is not only fulfill the expectations of their customer but to do more than they expect. Their customers are internal and external as well survey, feedback and other similar techniques can be used to measure the customers, satisfaction (R. Kundula, 2004).

Focus on quality
HR practices must be effective that can be supportive to implement the total quality management in the organization (R. Kundula, 2004).

Empowering frontline employees and an emphasis on team work

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The capabilities and competency of frontline employees can be boosted by involving them n decision making or by making them empowered this technique can be helpful to convert their abilities into actual performance (R. Kundula, 2004).

Developing measures of progress

HR practices must include some predefined standards white practices of performance management they must encourage the concept of benchmarking in various aspect like manufacturing & management in organizations these measures ultimately aiming to delight their customers (R. Kundula, 2004).

Managerial implication:
All the above seven HR practices concise the most important parts of high performance management in org. these practices can be helpful to backup the employees and for their high performance, when implemented together. In a climate where competition is prevailing, all organizations have to set an environment where all the employees, from high to low, are highly committed to their tasks assigned. For achieving this position, responsibilities of HR managers is not confined to keep all the things in an organization in good condition, rather they are to implement practices of high performance managements in a properlyplanned manner. In order to achieve this target, all the 7 practices mentioned above can provide basis to HR managers for ultimate adaptation of this model. This model consists of all the significant constituents, required to formulate a modern organization. I.e. quality, customer satisfaction and evaluation of predefined standards (R. Kundula, 2004).


Model for collaborative MBO

MBO, management by objective is the oldest technique that has been used largely in organizations for more than five decades. In spite of that, traditional MBO could 67 GROUP H MBA 3rd M1

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be used in proper manner where relationship b/w top management and employees in concerned and where task are assigned on individual bases. With the help of extensive deep study of experts team they conclude that an upgraded approach should be included in the framework of performance management the legends of organizational development like Wendell French and Robert Hallman included a technique of teamwork in the traditional frame of MBO called collaborative MBO, which can be valid to implement in organization in current situations. They presented this model with title of MBO: the team approach. This model published in California management review in 1975 (R. Kundula, 2004). This model is consisted of nine phases which are as under:

Phase-1: Diagnosis of Organizational problems

The system of collaboration can be used to recognize the issues in group level and at organizational level. The problems are identified by using the means of group surveys, small and large group interactions etc (R. Kundula, 2004).

Phase-2: information and dialogue

In order to introduce problem solving skills among the employees and to provide them training at all levels as a technique of CMBO, workshops will be conducted. For this purpose, some employees are provided with training to make them professional model. They in turn will train other employees (R. Kundula, 2004).

Phase-3: diagnosis of organizational readiness

Interviews and group meetings can be served as diagnostic technique to judge the decisions at organizational level whether the CMBO approach in accepted here to implement or not. Its acceptability is found to be low; workshops can be repeated to convince the employees who are not in right of CMBO to be implemented in their organizations (R. Kundula, 2004).

Phase-4: goal setting overall organizational level

On the basis of data received via group surveys, and interaction conducted at small and large group levels and through other sources like market data, designed 68 GROUP H MBA 3rd M1

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goals and objectives of organization are to be placed with fixed timeframe. This process requires collaboration of employee at large level (R. Kundula, 2004).

Phase-5: goal setting unit level

There are different functional units in every organization. Therefore, each and every unit will follow the same goals and objectives that are placed at organizational level. Objectives of these individuals are reviewed as per the willingness, hence given a final structure (R. Kundula, 2004).

Phase-6: goal setting individual level

Keeping in the mind the objectives of units and organization, all the employees set their goals at individual level. The concerned group reviews these individual objectives and gives them a final shape with collective will of that group member (R. Kundula, 2004).

Phase-7: performance review

All employees make a report of their progress in which they will note their accomplished activities, step by step there reports are reviewed by appointed group of employees after reviewing these reports, that designated group will make an ultimate report of performance for group and for organization (R. Kundula, 2004).

Phase-8: Re diagnosis
To identify and judge whether the process of CMBO brought any change or improvement inside the organization since the time it is implemented, a process of diagnosis will be repeated. In this way we will be aware about whether the process of CMBO is producing the results intended (R. Kundula, 2004).

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Phase-9: recycle
If the results are received as positive up to phase-9, the process of collaborative MBO will be repeated from the phase -4. In a case when results are received up to the mark and not as were expected, process will be restarted from phase-2 (R. Kundula, 2004).

Managerial implications
The nine phases of CMBO models are particularly technology and knowledge oriented and is highly beneficial for an organization. The dysfunctional effect created due to involvement based approach in conventional MBO model can be diminished by the method of collaborative MBO. Collaborative MBO has three principle implications for organizations. First, the employees contribute by their choice in formulating goals and objectives at organizational, unit and individual levels. Secondly, CMBO makes it sure that the targets of every employee set at individual level are strongly associated with their organization. Finally, it produces a feeling of unity inside an organization. Conversely, there must be well prepared implication of CMBO so as to comply with other organizational managerial strategy (R. Kundula, 2004). 13.4

Performance evaluation techniques

The performance of employees can be judge in an organization through various evaluation techniques. These techniques are:

1. Graphing rating scale

This is the most popular technique among all evaluator is responsible to review the performance by handing over some numeric figures. For example, for an outstanding performance there is assigned score 5 and for average performance, score will (R. Kundula, 2004).

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2. Forced choice
In indication of appraise, an evaluator is presented with a set of declarations reciting performance values of a particular job from which he/she should prefer a particular sum of accounts (R. Kundula, 2004).

3. Management by objective The evaluator reviewing that how much the performance is grown in adjacent to the aiming performance (R. Kundula, 2004). 4. Essay Evaluator illustrates vigor and limitations in the performance in term of explanatory structure (R. Kundula, 2004). 5. Critical incident technique
Evaluator narrates strong and weak points of appraisal (R. Kundula, 2004).

6. Evaluator employees






This explanation includes confrontations and accomplishment of appraisee (R. Kundula, 2004).

7. Weighted checklist
The evaluator will be endowed with a catalog of performance individualities in opposition to which evaluation is to be held out (R. Kundula, 2004).

8. Behaviorally anchored rating scales

Alongside the distinct, particular and stipulate quantifiable performance object, the evaluator judge performance of appraisee (R. Kundula, 2004).

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9. Behavioral observation scale

In indication to pre-set performance action principles, the evaluator reviews the performance (R. Kundula, 2004).


Ranking on the basis of overall standards

For positioning according to their performance, evaluator creates catalog of appraisers (R. Kundula, 2004).


Paired comparison

All the time evaluation is offered with two names of appraises. Among them both, evaluator should prefer the employee having high performance. Overall positioning will be completed on the basis of this exercise (R. Kundula, 2004).


Forced distribution

All the ranks will be predefined in their process beside which evaluator should allocate. The proportion of appraises will be ranked as exceptional, first-class, normal etc (R. Kundula, 2004).


Performance test

In order to review the performance; tests based on an amalgamation of paper and imitator, will be conducted (R. Kundula, 2004).

Managerial implication
All the practices confessed about above are constructive. Yet, effectiveness of these methods is conditional that leads to principle/ background for which there are concerned. Any of these practices cannot be succeed unless there is equality between the idea and the background in which the practice is used. The majority of organizations become victims at the time of executing a specified practice for performance evaluation of all sorts of workers and for all varieties of occupation.

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An amalgamation of practices is suitable to use for project and framework, base upon job and for better consequences (R. Kundula, 2004).


Mentoring practices

Mentoring is an ancient technique that may possibly suggest considerable reimbursement to both staff and institute regardless of its significance the technique is constrained to small number of corporations. This is primarily according to the observations of some administrators, the accomplishment of mentoring plan is burdensome and the paybacks that accumulate are not blamed to the funds provided numerous studies and practices of association have demonstrated this insight as gone astray for instance, Jmonica Forret of long island university and Daniel turban and Thomas Dougherty of university of Missouri accounted, on the basis of their study of mentoring techniques in a amount of fortune 50D corporations that mentoring adds for the subsequent remunerations (R. Kundula, 2004). Improve the performance of workers An improved consideration about traditions of company and direction about traditions of company and directional configuration Enhances approach of shore up and companionship Enhanced consciousness about familiarities of new employees. The possession of new proficiencies. An enhanced perceptive of others exertion manners. Development in integration in b/w the company. Interacted work ethnicity is crucial yet, mentoring curriculum executed devoid of satisfactory groundwork, predominantly introduction of executive as counselor without sufficient guidance be inclined to offer no advantage additionally, mentors and mentees both possibly indulged as a lumber for that reason, prior to requesting them to be advisors , administrators necessity be guided hallmark cards, Texaco trading and transportation, imperial oil limited, sell oil, and other companies are using the subsequent instructions to coach advisors:

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Take responsibility to educate advisors training and granted useful criticism , and provide Instructions to protgs about entertaining the criticism. Videos which demonstrate efficient mentoring affiliation. Booklet which confers concerns, for instance, understanding the mentors function, tacking other prolifically and inspecting prospects. Addresses to provide explanation about mentoring, reimbursements of mentoring and its drawbacks. and several

Besides these corporations have definite mentoring strategies, expounding The way how mentors and mentees choose and another. How summary page of prospective mentors and mentees are to be assembled in a manuscript.

How a mentor summary page is organized having ability to assemble particulars for example, why somebody would

Like to be a counselors, what he/she anticipates from the practices to achieve, what position mentor acquires in the Organization, what kind of practices he/she may encompass and of what type his/her pastimes and interests are (R. Kundula, 2004).

Managerial implication:
The experiences of corporations illustrate that mentoring recommends priceless reimbursements to the institute while employed with an obvious guidelines and practice structure these familiarities also demonstrate, it can be sufficient by no means that, merely, informing the workforce about they are mentor or protg at present similar to the various HR purposes, in this case also success cannot be achieved via shortcuts. For that reason, those organizations which resolute to follow a mentoring approach, ought to do such things with an assembled sketch mentoring can serve as prospective approach is triumph over other than performance related problems these problems and difficulties comprise: Feeble managerial residence conducts

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Frail obligations with organization Meager association b/w employees Underprivileged assimilation of staff with institute (R. Kundula, 2004).


Theory X and Y

Douglas McGregor projected an influential agenda, on the basis of his knowledge and examining the performance of executives, regarding the temperaments of people. This agenda is corresponding two sets of supposition regarding human deeds at job and is generally known as theory X and theory Y. The two deposits of postulations are essentially poles apart and contradictory to each one. Theory x is inflexible, bunged, and some sort of distrustful sculpts, while theory Y is buoyant, elastic and developed (R.
Kundula, 2004).These conjectures are as follows:

Theory X assumptions:
1. Typical individuals detest for work and will pass up if they can. 2. Due to the human attribute of having detested for work, the majority inhabitants ought to be pressurized, proscribed, bound for, and endangered with penalty to acquire them to set forward an appropriate attempt in the direction of the accomplishment of directorial intentions. 3. Common individuals have a preference to be heading for, inclination to evade task, have moderately minute aspiration, and would like security beyond all (R. Kundula, 2004)

Theory Y assumptions:
1. The outlay of substantial exertion and intellectual endeavor in work is as ordinary as play or rest 2. In order to generate exertion on the way to organizational goal, exterior directions and warnings of retribution are not serving as the meaningful sources. Individuals will choose their own directions and will have selfdiscipline for those objectives to which they are devoted to achieve.

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3. The extent of dedication to goals is in percentage to the volume of the plunder related with their attainment 4. Typical individual become skilled at, in appropriate circumstance. They recognize the duty as well as search for it. 5. In order to find the way out of organizational tribulations, the capability to work out on comparatively an elevated level of imagination, originality and inventiveness is extensively, not only just, dispersed in the population. 6. In the surroundings of contemporary industrial life, the logical competencies of a usual person are developing in some measure. This theory gained popularity through the book written by McGregor with the title The Human Side of Enterprise. This book was published in 1960. The theory X and Y is not more than a set of assumption. These assumptions cannot be the strategies adopted by managers in their practices (R. Kundula, 2004).

Managerial implication:
X and Y possibly will be merely a set of suppositions however contain incredible significance for decision-making live out. Perhaps, McGregor offered two intense contradictory conjectures that present a depiction of two worlds. Definitely, these two worlds facilitate executives to expand a widespread perception of persons conduct on job. Possibly, there will no worker who has all distinctiveness either of theory X or of Y or may be of both. The awareness of this premise assists a worker in having consideration about his conduct and performance in a fastidious state of affairs: whether to perform in manner of a person lying in conjectures of theory X or Y. the comprehension of these assumptions assists for efficient administration in diverse field of management that are planning, organizing, directing and controlling of human resource (R. Kundula, 2004).

13.7 Healthy scorecard

The link between the employees health and organizational performance is vital for enhancing the comfort of both the human resources and association, about that the administrators, academicians and professionals may possibly have never

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thought before. An extraordinary approach named as healthy scorecard by means of balancing scorecard methodology that verifies improving physical fitness of your human resources can add to the earnings of the organizations in astronomical figures (R. Kundula, 2004). Most important principals of this approach are: Severity and regularity of infections can be condensed significantly through superior quality health care learning and management in the institutions and at hand is immense confirmation which demonstrates that these measures are good for bottom line, for instance efficient asthma management can diminish hospitalized days by 77 %, asthma related emergency visits by 48% and urgent care visits by 32 %, and this can effect workplace output extensively. Organizations will be the greatest beneficiaries, which will be able to cut incident charge for anxiety, disease and injury, and costs per event. This approach has a number of effects; the organizations which will select this direction will take pleasure from surprising barrier of health expenditure increase. If health cost is constantly increasing we will not be able to give reason for a health investment strategy as it will be based on failure costs and we will not be able to follow six sigma process qualities. When the investment in employees health became out of control, workplace have not remained any talent to discontinue the useless out flow in their opportunity costs. They lose an influential switch for cost efficient heath decisions. Good leadership means great business and good leadership can be achieved through good health. Health care costs could be reduced through valuable management programs. By developing such types of programs burnout, absenteeism and health problems can be reduced. There is a direct positive relationship between employee welfare and leadership. This relationship in turn influences the HR process and measures of ecological health and security. All these would force the bottom line results (R. Kundula, 2004).

Managerial implication
Hr proficient needs to alter their center of attention from reimbursement in medical expenditures premium to asset in proactive physical condition management that decreases the reimbursement expenditure and enhance productivity. Healthy scorecards are also providing opportunities to highlight that 77 GROUP H MBA 3rd M1

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human resources and organization are not two separate entities rather employees health is organizations health (R. Kundula, 2004). 13.8





Many few of the performance evaluation exercises can be assumed to be free from criticism of prejudice and subjectivity. Though, most of the efforts to dismiss the favoritism and prejudice are restricted to shifting assessment set-ups and structures. That includes switching over to procedures and techniques like 360 degree appraisal and team assessment or using MBO criterion. But the alteration in structure only is not adequate to fetch transition as these changes in structures again contain their own inherent restrictions. So this change must be an adjunct to change in procedure, which incorporates the way in which the process is carried out, the involvement of appraisee and using productive criticism. Robert and Russell approved a principle for beginning a fair performance evaluation in their book organizational justice and HR management (R. Kundula, 2004). The soul of this recommendation is threefold as specified in the following: 1. stick to the subsequent critical rules: do the performance appraisal, for which you have promised subordinates should be appraised on an appropriate criteria you should have well-informed appraisers fair rating set-up should be used in the performance evaluation interviews interpersonal fairness should be maintained provide training to subordinates for enabling them to participate

2. While conducting appraisal interviews following rules should be followed:

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be encouraging and supportive while making discussions you should be participative if desired, both the developmental information and subordinates evaluation could be discussed in an interview

3. Only productive criticism should be used and negative criticism should be evade in an appraisal practice (R. Kundula, 2004).

Managerial implication:
Above mentioned prescription help managers to implement performance appraisal in an objective and fair manner. These three dimensional prescription provides a valuable insight that focuses on the processes, to ensure fairness in the performance appraisal (R. Kundula, 2004).



At the end of the appraisal phase, managers have a very significant role in conducting the appraisal interviews, that is critical towards understanding the human resources performance behavior and developmental requirements (R. Kundula, 2004). Supervisors of an aircraft company were encouraged by the company to observe some guidelines in conducting interviews, which are as follows: Give a notice to employees before 3 or 4 days of discussion or meeting and its purpose. And in some cases make them aware or let them know about the results of their written performance evaluation before meeting.

Each and every topic and aspect should be covered in discussion, plus employees should be encouraged to ask questions. Attack the problem rather then the person and be ready to provide suggestions for required activities for employees training and development.

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It is possible that at the time of interview or discussion the employees become nervous so create a friendly and helpful environment with purposeful tone to put your employee at ease. Evaluate the performance of each and every employee of the organization. Your discussion could be successful only when, both the parties will participate in discussion. Try to get employees viewpoint regarding the working environment or developmental activities or about their feelings while performing in that environment. Encourage employees to make suggestions. Make sure that employees fully understand and aware of your evaluation of their performance. Discuss both the past and the future. Discussion should be closed with a future improvement oriented and positive note (R. Kundula, 2004).

Managerial implications:
Such type of objective interview can create a deep understanding between the employee and the supervisor regarding the performance evaluation, expectations, future work plans and developmental requirements (R. Kundula, 2004). 13.10


essentials for effectiveness of 360-degree

360-degree feed back is the most prevalent multi-rater and multi-feedback system in business organization that has full-fledged abruptly. But collapse of this system is also wide-ranging owing to the insufficient training and less care workout by the administration. If certain fundamental rules are followed 360-degree feedback can provide predictable reimbursements and most excellent outcomes (R. Kundula, 2004). These fourteen essentials of M.A Dalton and G.P Hollenback are:

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Preparation of all participants Top management should act as visible players Feedback data should be tied to a larger program Ownership of feedback data should be stated clearly Integrity of process should be maintained Administrative checklist should be implemented to ensure 100 % accuracy Administration should be user friendly and should be simple for people to participate The rater and the employee should have a human contact with each other, and a safety net should also be provided as someone may have a very strong emotional reaction to the feedback. Proper timing should be preferred for conducting this activity, like downsizing is not the best time for conducting this activity. Before planning for the event, secrecy and mystery should be clarified. Recent data should be collected. Plan and anticipate for the events which possibly are unexpected or wrong for near future. And make backup facilitation ready for such types of incidents. Start the first 360-degree involvement from small level. Integrate the involvement of 360-degree feedback other interventions (R. Kundula, 2004).

Managerial implications:
Managers can check the accomplishment of their system in the supervision of these fourteen essentials because these practices are pinched from the best 360degree system practices of numerous organizations (R. Kundula, 2004).

13.11Seven determinants of employee compensation

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Compensation system has the power to attract, retain and motivate the employees to make outstanding performances; its just like a backbone of HRM. It should be kept in mind that compensation management is not an easy task; rather it is a tricky job that should be processed in a methodical style (R. Kundula, 2004). Applebaum & L Mackenzie presented seven dynamics that determines the compensation structure, which are: Market condition of labor and product, as supply and demand, pay levels, significance of skills and force. Sociopolitical and economic environment, as business cycle influence and power of labor. Characteristics of employees, as education, experience. Characteristics of industries, as wages in industry, highly competitive or low competitive industries. Style of enterprise, as administration style, objectives, approaches, etc Characteristics of job, as physical, mental, skill requirements and hard work mandatory to hold on the employment, etc. Characteristics of employees behavior, as absenteeism or turn over etc (R. Kundula, 2004).

Managerial implication:
Development, empowerment, communication or career planning could not yield any positive result if compensation system is not effective. So compensation could be said as the base of HR activities. The above mentioned description of compensation management helps managers to make an effective compensation system (R. Kundula, 2004).

13.12Performance related pay- 14 essentials

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M Armstrong, In his book management techniques prescribed fourteen essentials, by focusing these essentials performance related pay could became an effective compensation strategy (R. Kundula, 2004).

These essentials are; Type of work and employee on it should fit with the culture of the organization Reward should be linked to the effort of workers directly Reward follows the achievements from which it is generated Employees should be able to influence their performance by changing behaviors Targets and standards required should be very clear to them And they should be able to track their performance against these standards and targets Performances should be measured by adopting consistent and fair ways Reward should be clearly proportionate to the efforts of team or individual Employees normally expect that worthwhile rewards could be attained by effective performance Operations of performance related pay scheme are made on the basis of a defined and easily understood formula For the amendment of formula in specific situations, amendments are made on the basis of provisions which are built in the scheme Barriers in establishment of scheme should be of the type which ensures that employees will not receive those rewards which are not related to their own performance Installation and maintenance of the scheme should always be in the proper technique.

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Employees are involved in the scheme who are mostly covered by the scheme (R. Kundula, 2004).

Managerial implications:
These fourteen principles can help the managers to construct the design and install a sound performance related pay. But important thing is that the managers should check the efficiency of such type of schemes before implementing them as a companys policy (R. Kundula, 2004).


Seven tenets of performance management

In the recent ten years, performance management has achieved distinction as an outcome of institutions shove to attain advanced performance from workers. This has also turned out to be the prospective and consistent method to achieve the twofold aims of gratifying employee and requirements of organization. Conversely, professionals brought diverse types of mock-ups of performance management and different organizations espoused different ways to access performance management. The differences in the modulation of mock-ups have bred definite fallacy in the minds of experts. Consequently, in the course of drawing and accomplishment of performance management, the very first step is to recognize what the performance management actually is? What the things it is not included? Two well-known performance management practitioners, Tracey Weiss and Franklin Hartle, put forward seven doctrines which are helpful in simplifying various central and significant features of performance management in their own book having title Reengineering Performance management: Breakthrough in Achieving Strategy through People, which was published in 1997 (R. Kundula, 2004). These seven principles are:

1. Performance management is a core business process

In victorious institutions, performance management serves as a forceful element. Performance management requires to be obsessed by top supervision of organization and is associated with the progression of business arrangements. It turns into the manner in which deliberate change is attained, new ethnicities are constructed and business inventiveness is curved from thoughts in to certainty (R. Kundula, 2004).

2. There is no one-size-fits-all answer 84 GROUP H MBA 3rd M1

Report Title: Performance Management

There cannot be a single faultless mock-up for all organizations. To build up and purify an approach to performance management for each institute is imperative. Each organization needs to evaluate in which way performance of employee should be administered and with the assistance from line managers and staff performance management should be planned consequently (R. Kundula, 2004).

3. All aspects of performance matter

The cause of failure of various models of performance management is that they detain those constituents of performance only that can be beleaguered and considered. The process of performance management has got to replicate stability among quantifiable consequences and manifestation of the right matter which can direct towards the success of an individual and of an organization as well (R. Kundula, 2004).

4. Discretionary effort derives success

The accomplishment of the system of performance management depends upon capabilities of managers that how well they can distinct better performance whether it is reasonable and worthwhile equally. Additionally, as the result of receiving flexible attempts from corresponding people the rank of performance will automatically be elevated (R. Kundula, 2004).

5. Effective link with rewards get important messages across

Training and career development, non monetary remunerations given individually and in groups and monetary inducements and compensation associated with performance are equally important. Obtaining an accurate equilibrium is significant. There is an important position of performance management for strengthening the association among reimbursement and policy and among traditions of an organization (R. Kundula, 2004).

6. Ownership of the process is key

A powerful association between line manager and workforce can be built up with the help of an effectual and stable progression of performance management. In a result of this, there is an appropriate link between the progressions and factual performance on work. There are conversations inside the organization on performances on daily basis and the center of attention of these discussions is 85 GROUP H MBA 3rd M1

Report Title: Performance Management

advancement and endowing with acknowledgement to the workforce. These are the factual indications of a prospering performance ethnicity (R. Kundula, 2004).

7. Performance management is about relationships

Effectual performance management needs correspondence, and opinions and criticism. For this, bonding, openness, integrity and a legitimate sagacity of consideration is required. A concerned atmosphere provides a basis for a free discussion, where all the members are confident that their views and opinions can be taken in notice and can be implicit in a firm environment (R. Kundula, 2004).

8. Managerial implication
There are two enhanced imminent for administrators in seven codes of belief illustrated above. First of all, each institute ought to build up its personal performance management mock-up that should be appropriate to its managerial traditions and purposes. Implementation of average mock-up or as of other managerial practices possibly will outcome in divergence. Secondly, at the time of rising and implementing a performance management approach; administrators have to be practical. These seven doctrines recommend these pragmatic considerations (R. Kundula, 2004). 13.14

Allied Signals Performance Management Model

The accomplishment of performance management of administrative workforce focuses in the region of its impartiality and evenhandedness. The impartiality can be guaranteed merely all the way through quantifiable considerations. Additionally, these procedures must be broad and include and must possess those characteristics crucial for managerial usefulness. On the other hand, it is an exceptional chore raising these factors and making a decision leading towards advantageous behavioral characteristic. Allied Signal is an association that effectively made this a feasible charge by bringing in worlds highly praised performance management procedures (R. Kundula, 2004).

These measures are demonstrated in following table:

Table #...
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Success Parameters
1. Business acumen aptitude for business Demonstrates knowledge, interest and Knows competition Familiar with strategies and tactics Manages by fact 2. Customer focus satisfaction expectations Promotes and maintains strong customer relationship 3. Vision and purpose vision Inspires and motivates Align the organization 4. Value and ethics lives by company values Adheres to code of conduct Rewards right behaviors Ensure that laws are obeyed 5. Bias for action achieve important goals demonstrates a scene of urgency to Sets priorities Focuses on speed High energy Reduces cycle time and bureaucracy 87 GROUP H MBA 3rd M1 see possibilities; optimistic Creates and communicates compelling focuses on work processes for customer Meets internal and external


Report Title: Performance Management

Eliminates waste and unnecessary work 6. Commitment widely trusted Takes ownerships Candid and forthcoming Delivers on commitments 7. Teamwork projects initiates and supports meaningful Demonstrates trust in team members Serves on teams Celebrate success 8. Innovation taking leadership Establishes processes for continuous improvement 9. Developing people assembles strong teams Empowers and trains people Communicate effectively Provides rewards, feedback and recognition Demonstrates and stimulates passion and commitment 10. Performance set and achieve ambitious goals Listen and responds Drives for continuous improvement Measure the right thing Get results 88 GROUP H MBA 3rd M1 promotes creativity and informed risk Strives for technical and market

Report Title: Performance Management

11. Technical has function or job specific competencies

Managerial implication:
The achievement features of Allied Signals performance management; illustrated above provide a realistic glossary to all those aims to broaden purposes and computable performance aspects. HR executives ought to remind that these strictures in fact provide sources to attain the organizational objective and also direct the executives in their performance. It engenders immense responsiveness, and illuminates predictable of administers performance, to one side from directing them in their profession. Obviously, it certainly positions the foundation for performance evaluation of executives. all institutes that desire to be triumphant and are indomitable to perform a logical HRM, ought to generate a performance management mock-up that is analogous to the current one (R. Kundula, 2004).


Performance Appraisal Challenges

The HR professionals often face many challenges in designing the performance appraisal system. There are many challenges regarding this but mostly they have to face legal constraints, rater biases, and appraisal acceptance (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.1 Legal Constraints

All the departments of HR must use the selection tool which is reliable and valid. Whether they are taking some interview, test, or paper it must be valid and reliable. There should not any discrimination in the selection of the candidates. If there is any discrimination in department of HR there decision must be challenged because that will lead them in the violation of equal employment law and other laws as well. If you fire any employee without any reason it may also create challenges. Demotion, layoff, improper promotion of the employees is also some reasons which lead you towards challenges (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

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For example, General Motors use subjective evaluation of the employees and there was some discrimination. For doing this they had to face many difficulties and challenges. The court ordered them that a company cant follow these kind of vague and subjective rules in the process of selection of employees. This kind of order from the court was shame full for the General Motors (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.2 Rater Biases

The bias occurs when there is violation of the measures. We can remove the bias with the help of proper training, when the rater remains emotionally unattached during the evaluation of the performance of the employees (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006). Following are the most common rater biases: The halo effect Cross-cultural biases The error of central tendency Personal prejudice The recency effect

14.2.1 The halo effect

When there occurs personal liking and disliking of the employees this lead towards the halo effect. For example if a supervisor likes any employee because he might be his friend or relative it may distort to estimate his performance. This problem also occurs when the supervisor evaluate personality traits instead of behaviors (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.2.2 Cross-cultural biases

It means that the people think they will be preferred on the basis of there culture. When in some cultures the people are preferred due to some cultural conditions this lead towards the cross culture bias. For example in the Asian culture the older employees are treated with greater respect and having a greater esteem as compare to the western countries. And also if we see in the Arab cultures women 90 GROUP H MBA 3rd M1

Report Title: Performance Management

are expected to play a very subservient role. So most of the women and older men receive biases because of these cultural differences (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.2.3 The error of central tendency

The error of central tendency occurs when we rate all the employees at an equal level. We distort the ratings scales and dislike to rate the employees as effective or ineffective. This error leads towards the dissatisfaction of those employees which are working very hard for the organization. Instead of rating the employees as they are performing we place them near the centre of the rating sheet (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.2.4 Personal prejudice

When a rater rates on the basis of favoritism this may lead towards the distortion of the rating. For example it has been observed that in most of the HR departments the male supervisors support the men as compare to women. The specialists have to pay the special attention towards personal prejudice because this is the most critical issue in the existing era (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

14.2.5 The recency effect

When we used subjective approach in measuring the performance of an employee it means that we are not taking into account his recent performance whether it was good or bad. So that affects the rating which they deserve. When we are rating some employee we must have to check his recent performance (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006). 15.

How to avoid appraisal problems

15.1 Reducing rater biases

As we know that there is a great damage for the organization due to the potential errors and challenges in the performance appraisal system. There are some instruments to handle these errors individually. For example with the help of forced distribution method we can overcome the error of central tendency and leniency and the error of halo effect. But the problem is that there is no standardized rule to overcome all these errors collectively. We can remove these biases with the help of training, proper feedback, and proper selection of the 91 GROUP H MBA 3rd M1

Report Title: Performance Management

performance appraisal techniques. There are three steps of removing these biases. First the things which can cause bias should be explained. Secondly we should clarify the role of performance appraisal in the job of the employees. Third if some time we are going to use the subjective measure or there is some need of using them these should be used as the part of the training. For example class room training can be provided to the workers for giving them the information regarding the conditions of their work. Additional training can be provide to make correct the errors which employees are facing during there work. It is the duty of the HR departments to use a proper tool or technique in the selection of the employees and in the selection of the performance appraisal technique (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

15.2 Avoiding legal constraints

It is easy to say that if there is no appraisal system in the organization then the performances of the employees is not up to the mark. If there is no appraisal system in the organization then we cant evaluate the performances of our employees and not those which could be clearly finished from the organization, we can just minimize them. And if we want to minimize these problems first of all there should be the better understanding about these problems, because without understanding them you are unable to control them (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006). And secondly there should be the usage of proper and right appraisal tool to measure the performance. For example if we are using the ranking method to avoid the central tendency in the organization some times all the employees perform very well but they are forced distribution method which does not provide the absolute rating (Byars & Rue, 2006; Werther & Devis, 1996; Dessler, 2006).

Sometimes there is not a proper training of the employees in the organization. The trainer just watches a video and ranked the employees. They did not provide them better training that how they can improve there work. Although training is not the solution for all the problems but a large number of factors which are related to the training such as pay ratings, union pressure and employees turnover are more important then training. It means that we do not always focus on training but other factors should also be considered (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

The fourth option is diary keeping that the raters should always keep a diary to record the incidents occurs in the organization. But this method was not very much 92 GROUP H MBA 3rd M1

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successful. Because the rater has not so much time to record all these types of incidents, he has also many tasks and challenges related to his job. It is not possible for him to keep an eye that what is going on in the organization. So the manager should also keep in mind that he should build a constructive relationship between the employees, as the performance ratings shows the quality of the relationship between the manager and the employees working in the organization. Always good relationships laid the foundations of a good working atmosphere in the organization and it is also important to know the employment law that applies the appraisals (Byars & Rue, 2006; Werther & Davis, 1996; Dessler, 2006).

15.3 Know Your Performance





In 1964 the passage of Title VII was passed to create a relationship between the action of the employees and appraisals. In most of the situations the illegal actions happens due to the improper appraisal system. So whenever any illegal decision happens in the organization there is violation of the title VII. Personal bias, improper rating (Either everyone high or low), or sometime deciding on the basis of just recent activity of the employees are some other reasons on which the court decide that the appraisal system is improper (Dessler, 2006). Following are some rules for the organizations to develop a proper and legal appraisal system. There should be a standard in organization about what you meant by a better performance. There should be a rating scale in the organization to measure the performance. There should be a written awareness of these standards and rating scales among the employees. While using a rating scale in your organization traits such as loyalty and honesty must be avoided. There should be training supervisors in the organization because they are able to use it properly.

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The employees which are evaluated have a daily contact with there supervisors. Different rating scale should be used for the each jobs performance. The usage of a single rating scale in all the performance is illegal and also not proper. If it is possible there is more than one appraiser conduct the appraisal because it is easy to cancel out the errors. There should be an opportunity for the employees to review and check whatever they have done before making it final. No authority has to be provided by to organization to a single appraiser to check the performance of an individual employee (Dessler, 2006).

Byars, L. L., & Rue, L. W. (2006), Human Resoucre Management, Mc Graw Hill Inc. Dessler, G. (2006), Human Resource management, Pearson Publications. Dessler, G., & Varkkey, B. (2008), Human Resource Management, pearson publications. Holbeche, L. (1999), Aligning Human Resource and Business Strategy. Kandula, S. R. (2004), Human Resource Management in Practice, Prentice Hall of Indi. Kandula, S. R. (2004), Human Resource Management in Practice with 300 Models, Techniques and Tools, New Dehli. P. Anthony, L. Pevrewe, M. Kacmar (1998), Human Resource Management A strategic Approach, Dryen Pr. 94 GROUP H MBA 3rd M1

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Werther, W. B., & Davis, J. K. (1996), management, Irwin/Mc Graw Hill. Human Resource and personnel

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