INTERNAL RESEARCH

ASSIGNMENT

Name of the candidate:

Gautam
Enrollment no. :

Rishi

1255

Course:
MBA(M) sec-A

Batch:
2014-2016

Semester:

Subject Name:
Management Process And
Organisation Behaviour
Subject code:
101

MS-

Topic of assignment:
Performance Appraisal

Subject Teachers name:

Meenakshi Singh

Ms.

Date of submission:
5th 2014

October

Question 3
Performance appraisal may be informal or formal. To improve performance, appraisal should be
based on goals jointly set by managers and subordinates. Discuss the important issues involved
in making promotion, transfer, demotion and separation decisions. Consider an example for any
organization of your choice.

Meaning Of Performance Appraisal

Performance Appraisal means to evaluate, judge or check the work of employee over a period oft
ime, and then inform whether the employee achieved the objectives in that time period.
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal
provides a periodic review andevaluation of an individual's job performance. Although the
appraisal forms may only be completed once a year, the job of performance appraisal is
continuous sometimes daily - and requires effective communication on both the part of
the supervisor and the employee.
The supervisor is ultimately responsible to make sure these conversations actually take place
and are documented. It is essential that the supervisor hold all performance discussions and
documentation in complete confidence. One employees performance should never be discussed
with another employee. This action is one of the best ways for a supervisor to lose the trust of all
employees.
It also provides supervisors with critical feedback with which they can help employees improve
their performance and often also provides supervisors with ideas on how they can become a

better supervisor. The completed Performance Appraisal forms are maintained in the employees
personnel file in Human Resources and are released only to the employee, the supervisor or other
persons authorized by law, regulation, or policy. Performance appraisal is generally done in
systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.

Performance Management Model

Performance management is an
integrated process of defining, assessing, and reinforcing employee workbehaviors and outcomes
. Organizations with a well developed performance management process often
outperform those without this element of organization design.

Following are the characteristics of the Performance Appraisal:

1. Agreed Objectives related to the assigned job/standard (job and position description):
performance appraisal is related with agreed assignments and that of assigned jobs in such a way
that they have to be completed in an agreed manner and within a period of time so as to earn the
performance appraisal in form of compensation .

2. Time period: the targets have to be achieved within a given period of time as time period is
very necessary so as to earn the performance appraisal. If you are achieving target after the set
time by the orgnisation than obviously you are not going to earn any kind of performance
appraisal.
3. Skills required to achieve objectives: there are different kind of qualitative and quantitative
skills required to achieve performance appraisal or we can say to attract consumers. An
individual must be capable enough to sell his products within a given period of time so as to earn
the desired performance appraisal.
4. Check that objectives are achieved or not: expecting to get performance appraisal without
analyzing that whether you have achieved performance appraisal or not and after that you can
apply for performance appraisal .
5. Inform the employee if the objectives were achieved or not: the employee must be informed
about the objective as whether it has been achieved or not so the employee can put more efforts
to achieve the desired objective so as to geth the performance appraisal.
6. If not achieved why these were not achieved: there must be certain reasons as why were these
objectives not achieved and the employee must give absolute reasons.
7. If achieved, reward and motivate: if the certain defined objectives are achieved , the employee
must get his performance appraisal of compensation and promotion.

Importance of Performance appraisal

Performance appraisal is important task of managers to help other employees to improve their
performance. The manager who supervises the work of subordinate, knows the
knowledge, skills andattitudes required for accomplishing jobs and whether these are possessed
by employees. Performance Appraisal of employees is important for the
organization because the appraisal of work completed by each employee determines whether the

organization is moving in

the direction of its

objectives. However, most managers find it difficult to help others to coach ( guide) and appraise
performance of employee. Judging an employee's performance accurately is not always easy, bec
ause it requires constant watch on the work of employees.
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.

2. Compensation: Performance Appraisal helps in chalking out compensation packages for

employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.

3. Employees Development: The systematic procedure of performance appraisal helps the

supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.

4. Selection Validation: Performance Appraisal helps the supervisors to understand the

validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.

5. Communication: For an organization, effective communication between employees and

employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.

c. It also helps in maintaining cordial and congenial labour management

relationship.
d. It develops the spirit of work and boosts the morale of employees.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a persons efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.

Ratings Definitions
Use the following as a general guide when determining your ratings for each item:

1.
2.
3.
4.
5.
6.

Unacceptable: A standard of performance well below minimum requirements; not

effective
Needs Improvement: A standard of performance generally below acceptable standards;
needs development
Meets Expectations: A standard of performance meeting all normal requirements of the
position
Exceeds Expectations: A standard of performance generally exceeding expected results;
above average
Outstanding: A standard of performance leaving no consequence to be desired; highest
possible effectiveness
.

Types of Appraisal
There are mainly two types of performance appraisal in an organization:

1. Formal Appraisal
2. Informal Appraisal
These appraisals are analysed in a business organisation in avery different manner
Formal Appraisals
Formal systematic appraisal usually occurs semi-annually or annually. Formal appraisal has four
major purposes:
1.To let employees know formally how their current performance is being rated;
2.To identify employees who deserve merit raises;
3.To locate employees who need additional training; and
4.To identify candidates for promotion

How is Formal Appraisal Done?

As we know Human Resource manager have job and position descriptions for all jobs in the
organization. The objectives tobe achieved are mutually agreed between the `supervised' and `su
pervisor'. The agreed objectives are written down on a `form'. This form is
a special form which contains following information:
1. Name of employee
2. Job title
3. Job/position description
4. Objectives/goals to be achieved in a year or six months or three months
5. training received
6. Training to be received
7. Does the employee require special guidance
8. Strengths and weakness of employee
9. Signature of immediate boss
The performance appraisal forms are different in different organizations but most of
the form will have the above information.
Informal Appraisals
Informal appraisal isa day to day routine appraisal, when managers meet their subordinate almost
daily. In this process they use following methods:

1. Observe
2. Communicate
3. Check work
4. Give immediate feedback
So informal performance appraisal means continual process of feed back to employees. It is
information about how well employees are doing their work for theorganization. Informal apprai
sal can be conducted on a day-to-day basis

GOAL SETTING MODEL

Goal setting model in an organisaton requires careful planning. Goal can be established n a
variety of ways the best way to establish goals is to set joint participation between the employee
and the supervisor.
Goal Setting
SMART goals
Specific-precise and detailed
Measurable-with criteria for determining progress and success
Achievable-attainable and action oriented
Realistic-relevant and aligned
Time related-grounded with a time frame.
This whole system is known as 90 degree appraisal system also called 2
tiers

Performance appraisal is very helpful in making decisions related to promotion , transfer ,

demotions and separations. It plays a very important role in these four aspcts. Let us
discuss how.

Promotions, Transfers, Demotions, and Separations

Promotion : Employees are promoted to next higher position when their performance is
in accordance with standards laid down by
the organizations, i.e. when employees achieve targets over a given period of time,
for certain number of years.
Transfers Employees are transferred for variety
of reasons. When employee is promoted, they can betransferred because the higher
level position may be available at some other places. Employees aretransferred because the perfo
rmance may not be satisfactory and organization cannot lay-off employee,.
Employees may be transferred for personal reasons or they are transferred because of on thejob training.
Demotion Demotion is a kind of punishment. When employees have not performed according to
the laiddown standards, or show indiscipline or disobedience or negligence or irresponsibility etc
they may be demoted or we can say they are briught down to a lower level than they were before
the assigned task.
Separation
In case of extreme and continuous negligence and indiscipline employees can be laid-off. The
movement of personnel within an organization
their promotion, transfer, demotion, and separation is a
major aspect of human resource management. The actual decisions about whom to promote and
whom to fire can be the most difficult, and important, which a manager has to make.

The Four C's Model

The Four Cs model forms the basis of HRM. It addresses areas that must be focused when
selecting people for organization. These are:

1. CompetenceHow competent are employees in their work? Do they need additional training?
Performance evaluations by managers can help determine what talent is available. To what
extent do HRM policies attract, keep and develop employees with skills and knowledge needed
now and in the future?
2. Commitment:. How committed are employees to their work and organization? Surveys can b
e conducted through interviews and questionnaires to find answers to this question.
3. Congruence:. Is there agreement, between the basic philosophy and goals of the organization
and its employees? Is there trust and common purpose between manages and
employees? Incongruence can be detected in the frequency of strikes, conflicts between
managers and subordinates, and grievances. A low level of congruence results in low levels
of trust.
4. Cost effectiveness: Are HRM policies cost-effective in terms of wages? benefits,
turnovers, absenteeism, strikes, and similar factors

Let us take the example of a company who uses the various techniques of
performance appraisal.

IDEOLOGIES OF TATA MOTORS

Appraisal And Reward Appraisal

1. New appraisal system based on KRAs and Targets.
2. Review of targets at regular interval
3. People development an important KRA

Reward
1. Promotion based on performance
2. Productivity and profit linked incentive schemes.
3. Training including long-term Term

Career Design
1.
2.
3.
4.
5.
6.

Performance and potential based appraisal

Fast track option for high performance
Promotions after managers vacancy based
Interviews for performance above appraisal
Selection of supervisors performance /attendance/discipline records.
Job rotation-including inter functional

Retention and employee welfare

1.
2.
3.
4.
5.
6.

Residential colonies for employees

Vehicle loans
Household equipment loans
House building advance
Annual advance
Proposed MUL pension scheme

Suggestion schemes and quality circles

1.for btter quality and productivity
2.Through involvement of all employees and team work

Criterias
1. Ideas
2. Efforts
3. Result: cost reduction/productivity improvement

HR INITIATIVES
1.
2.
3.
4.
5.
6.

Realigning organizational culture based on new vision and values.

Objective performance management and development system
Career planning and promotion policy
Competency mapping
Revised recruitment policy
Strong focus on training initiatives-building a learning organization-continuous value
addition to professional skills
7. Union alignment
8. Employee involvement and participation

Stated above are some of the basic commonly used techniques that are adopted by
companies and TATA MOTORS is one of those companies that generally help the
employees to appraise their performance by giving the stated above welfare schemes .

BIBLIOGRAPHY
1. www.jethr.com
2. www.ukessays.com/essays
3. www.managementstudyguide.com/performaceappraisal
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Master Document Text

INTERNAL RESEARCH ASSIGNMENTName of the candidate: Rishi Gautam
Course: MBA(M) sec-A
Semester: 1
code: MS-101Topic of assignment: Performance Appraisal Subject Teacher's name: Ms. Meenakshi Singh
Date of submission:Question 3Performance appraisal
may be informal or formal. To improve performance, appraisal should be based on goals jointly set by
managers and subordinates. Discuss the important
issues involved in making promotion, transfer, demotion and separation decisions. Consider an example
for any organization of your choice.Meaning Of
Performance
AppraisalPerformanceAppraisalmeanstoevaluate,judgeorchecktheworkofemployeeoverap
eriodoftime,andtheninformwhether
theemployeeachievedtheobjectivesinthattimeperiod. Performance Appraisal is the systematic
evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal provides
a periodic review andevaluation of an
individual's job performance. Although the appraisal forms may only be completed once a year, the job of
performance appraisal is continuous
sometimes daily - and requires effective communication on both the part ofthe supervisor and the
employee. The supervisor is ultimately
to make sure these conversations actually take place and are documented. It is essential that the
supervisor hold all performance discussions and
documentation in complete confidence. One employee's performance should never be discussed with
another employee. This action is one of the best ways
for a supervisor to lose the trust of all employees. It also provides supervisors with critical feedback with
which they can help employees improve
their performance and often also provides supervisors with ideas on how they can become a
better supervisor. The completed Performance Appraisal
forms are maintained in the employee's personnel file in Human Resources and are released only to the
employee, the supervisor or other persons
authorized by law, regulation, or policy. Performance appraisal is generally done in systematic ways which
are as follows:The supervisors measure the
pay of employees and compare it with targets and plans.The supervisor analyses the factors behind work
performances of employees.The employers are in
position to guide the employees for a better performance.Performance Management
ModelPerformancemanagementis an integratedprocessofdefining
assessing,andreinforcingemployeeworkbehaviorsandoutcomes.Organizationswitha well
developedperformancemanagementprocessoften
outperformthosewithoutthiselementof organizationdesign.Followingarethecharacteristicsof
thePerformanceAppraisal:1. Agreed
Objectivesrelatedto theassignedjob/standard(jobandpositiondescription): performance appraisal
is related with agreed assignments and that of
assigned jobs in such a way that they have to be completed in an agreed manner and within a period of
time so as to earn the performance appraisal in
form of compensation .2. Timeperiod: the targets have to be achieved within a given period of time as
time period is very necessary so as to

the performance appraisal. If you are achieving target after the set time by the orgnisation than obviously
you are not going to earn any kind
performance appraisal.3. Skillsrequired toachieveobjectives: there are different kind of qualitative and
quantitative skills required to achieve
performance appraisal or we can say to attract consumers. An individual must be capable enough to sell
his products within a given period of time so
as to earn the desired performance appraisal.4. Checkthatobjectivesareachievedornot: expecting
to get performance appraisal without analyzing
that whether you have achieved performance appraisal or not and after that you can apply for
performance appraisal
theobjectiveswereachievedornot: the employee must be informed about the objective as whether it
has been achieved or not so the employee can put
more efforts to achieve the desired objective so as to geth the performance appraisal.6.
Ifnotachievedwhythesewerenotachieved: there must be
certain reasons as why were these objectives not achieved and the employee must give absolute
reasons.7. Ifachieved,rewardandmotivate: if the
certain defined objectives are achieved , the employee must get his performance appraisal of
compensation and
ImportanceofPerformanceappraisalPerformanceappraisalisimportanttaskofmanagerstohelpo
theremployeestoimprovetheirperformance
Themanagerwhosupervisestheworkofsubordinate,knows the knowledge
skillsandattitudesrequiredforaccomplishingjobsandwhetherthesearepossessed by
employees. PerformanceAppraisal
ofemployeesisimportantforthe organizationbecausetheappraisalof
workcompletedbyeachemployeedetermineswhether the organization
ismovinginthedirectionofits
objectives.However,mostmanagersfinditdifficulttohelpotherstocoach(guide
andappraiseperformanceofemployee.Judginganemployee'sperformanceaccuratelyisnotalwa
yseasy,becauseit requiresconstantwatchon
theworkofemployees.Promotion:Performance Appraisal helps the supervisors to chalk out the
promotion programmes for efficient employees. In this
regards, inefficient workers can be dismissed or demoted in case.Compensation:Performance
Appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give
worth to a performance. Compensation packages
which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be
merit rather than seniority.Employees Development:The systematic procedure of performance appraisal
helps the supervisors to frame training policies
and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be
designed for efficient employees. It also helps in
framing future development programmes.Selection Validation:Performance Appraisal helps the
supervisors to understand the validity and importance of
the selection procedure. The supervisors come to know the validity and thereby the strengths and
weaknesses of selection procedure. Future changes in
selection methods can be made in this regard.Communication:For an organization, effective
communication between employees and employers is very
important. Through performance appraisal, communication can be sought for in the following
ways:Through performance appraisal, the employers can

understand and accept skills of subordinates.The subordinates can also understand and create a trust
and confidence in superiors.It also helps in
maintaining cordial and congenial labour management relationship.It develops the spirit of work and
boosts the morale of employees.Motivation
Performance appraisal serves as a motivation tool. Through evaluating performance of employees,
a person's efficiency can be determined if the
targets are achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.Ratings DefinitionsUse
the following as a general guide when determining your ratings for each item: Unacceptable: A standard
of performance well below minimum requirements
not effective Needs Improvement: A standard of performance generally below acceptable standards;
needs development Meets Expectations: A standard of
performance meeting all normal requirements of the position Exceeds Expectations: A standard of
performance generally exceeding expected results
above average Outstanding: A standard of performance leaving no consequence to be desired; highest
possible effectiveness.TypesofAppraisalThere are
mainly two types of performance appraisal in an organization:Formal Appraisal Informal AppraisalThese
appraisals are analysed in a business
organisation in avery different manner
FormalAppraisalsFormalsystematicappraisalusuallyoccurssemi-annuallyor annually
Formalappraisalhasfourmajorpurposes:1.Toletemployeesknowformallyhowtheircurrentperfor
manceis beingrated
Toidentifyemployeeswhodeservemeritraises;3.Tolocateemployeeswhoneedadditionaltraining
;and
ToidentifycandidatesforpromotionHowisFormalAppraisalDone?As
weknowHumanResourcemanagerhavejobandpositiondescriptionsforalljobsin
theorganization.Theobjectivestobeachievedaremutuallyagreedbetweenthe`supervised'and`s
upervisor
Theagreedobjectivesarewrittendownon a`form'.Thisformis
aspecialformwhichcontainsfollowing information:1. Name ofemployee2. Jobtitle
Job/positiondescription4. Objectives/goals to beachievedin ayearorsixmonths orthreemonths5.
trainingreceived6. Trainingto bereceived
Doestheemployeerequirespecialguidance8. Strengthsandweaknessofemployee
SignatureofimmediatebossTheperformanceappraisalformsaredifferentindifferentorganizations
butmostof theformwill
havetheaboveinformation.InformalAppraisalsInformalappraisalisadaytodayroutineappraisal,
whenmanagersmeettheirsubordinatealmostdaily
In thisprocesstheyusefollowingmethods:1. Observe2. Communicate3. Checkwork
GiveimmediatefeedbackSoinformalperformanceappraisalmeanscontinualprocessoffeedback
toemployees.It
isinformationabouthowwellemployeesaredoingtheirworkfortheorganization.Informalappraisal
canbe conductedon a day-to-daybasisGOAL
SETTING MODELGoal setting model in an organisaton requires careful planning. Goal can be
established n a variety of ways the best way to
goals is to set joint participation between the employee and the supervisor.Goal Setting SMART
goalsSpecific-precise and detailedMeasurable-with
criteria for determining progress and successAchievable-attainable and action orientedRealistic-relevant
and alignedTime related-grounded with a time
frame.This whole system is known as 90 degree appraisal system also called 2 tiersPerformance

appraisal is very helpful in making decisions

to promotion , transfer , demotions and separations. It plays a very important role in these four aspcts. Let
us discuss how.Promotions,Transfers
Demotions,andSeparationsPromotion :
Employeesarepromotedtonexthigherpositionwhentheirperformanceis inaccordancewith
standardslaiddownby theorganizations,i.e.whenemployeesachievetargetsovera
givenperiodof time,forcertainnumber ofyears.Transfers
Employeesaretransferredforvariety
ofreasons.Whenemployeeispromoted,theycanbetransferredbecausethe higher
levelpositionmaybeavailableatsomeotherplaces.Employeesaretransferredbecausetheperfor
mancemaynotbesatisfactoryandorganization
cannotlay-offemployee,.Employeesmaybetransferredforpersonalreasonsor
theyaretransferredbecauseof onthe-jobtraining.Demotion
Demotionis akindof punishment.Whenemployeeshavenotperformedaccordingto
thelaiddownstandards
orshowindisciplineordisobedienceornegligenceorirresponsibilityetctheymaybe demoted or
we can say they are briught down to a lower level
than they were before the assigned task.Separation
Incaseofextremeandcontinuousnegligenceandindisciplineemployeescanbelaid-off
Themovement ofpersonnelwithinan organization
theirpromotion,transfer,demotion,andseparation is a
majoraspectofhumanresourcemanagement.Theactualdecisionsaboutwhomtopromoteand
whomto firecanbe themostdifficult,andimportant
whichamanagerhastomake.TheFourC'sModelTheFourCs model forms thebasisofHRM
Itaddressesareasthatmustbefocusedwhenselectingpeoplefororganization.Theseare:1.Com
petenceHowcompetentareemployeesintheirwork? Do
theyneedadditionaltraining?Performanceevaluationsbymanagerscanhelpdeterminewhat talent
isavailable.To whatextent do HRMpoliciesattract
keepanddevelopemployeeswithskillsandknowledgeneedednowandin the future?
2.Commitment
Howcommittedareemployeestotheirworkandorganization?Surveyscanbe
conductedthroughinterviewsandquestionnairestofindanswersto
thisquestion.3.Congruence:.Isthereagreement,betweenthebasicphilosophyandgoalsof the
organizationanditsemployees
Istheretrustandcommonpurposebetween manages and employees?
Incongruencecanbedetectedin thefrequencyofstrikes, conflicts
betweenmanagersandsubordinates,andgrievances.Alow level
ofcongruenceresultsinlowlevelsof trust.4.Cost effectiveness
AreHRMpoliciescost-effective intermsofwages?benefits,turnovers,
absenteeism,strikes,andsimilarfactorsLet us take the example of a company
who uses the various techniques of performance appraisal.IDEOLOGIES OF TATA MOTORSAppraisal
And Reward AppraisalNew appraisal system based on KRAs
and Targets.Review of targets at regular intervalPeople development an important KRARewardPromotion
based on performanceProductivity and profit
linked incentive schemes.Training including long-term TermCareer DesignPerformance and potential
based appraisalFast track option for high
performancePromotions after managers vacancy basedInterviews for performance above
appraisalSelection of supervisors - performance
discipline records.Job rotation-including inter functionalRetention and employee welfareResidential

colonies for employeesVehicle loansHousehold

equipment loansHouse building advanceAnnual advanceProposed MUL pension schemeSuggestion
schemes and quality circles 1.for btter quality and
productivity 2.Through involvement of all employees and team workCriteriasIdeas EffortsResult: cost
reduction/productivity improvementHR
INITIATIVESRealigning organizational culture based on new vision and values.Objective performance
management and development systemCareer planning
and promotion policyCompetency mappingRevised recruitment policyStrong focus on training initiativesbuilding a learning organization-continuous
value addition to professional skillsUnion alignmentEmployee involvement and participationStated above
are some of the basic commonly used techniques
that are adopted by companies and TATA MOTORS is one of those companies that generally help the
employees to appraise their performance by giving the
stated above welfare schemes