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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2

Q1. What are the features of a Performance management framework? Ans. The Performance Management Framework is a group of performance-related processes and methodologies, sequenced and integrated to effectively raise organisational awareness of performance management. A good performance management system helps organisations achieve their aims and objectives. The two important business processes that help in performance management are focusing on team performance and motivation. The focus on team is very important, because on a wider perspective, the entire organisation is nothing but a big team, trying to achieve a common goal that is profit for the organisation. Understanding how a team works and using methodologies to improve team performance leads to organisational growth and success. In this unit, we will discuss the various aspects of improving team performance. Motivation is another important factor for organisational success. The employees are the biggest asset of an organisation. Motivation helps to make employees work to their full potential, which in turn leads to individual as well as organisational growth. Managers should understand the process of motivation and use them effectively. In this unit, we will discuss the process of motivation and the link between performance and motivation. Learning Objectives After studying this unit, you should be able to: describe the importance of focusing on team performance. discuss motivation and performance management. explain the process of motivation. Focussing on Team Performance A team consists of two or more individuals. These individuals have specific role assignments. They must perform specific tasks and must interact or coordinate to achieve a common goal or outcome. In addition, teams make decisions, have specialised knowledge and skills and often work under conditions of high workload. Teams can be distinguished from small works groups on the basis of the fact that teams have unique requirements for coordination and task interdependency. Teamwork normally involves team members adjusting to each other either sequentially or simultaneously in order to achieve team goals. The need for shift In the past, the focus was on performance management of individuals. But, today, organisations have realised that results are achieved by team efforts although individuals are also important. Individual focused performance systems will only propagate divisiveness and may even hamper teamwork. The changed global scenario has brought in a new era which is called the competence era. This competence era further perpetuates individual performance management rather than team performance management. This is mainly because of the pressure to differentiate. The various sources of pressure are: Differentiated pay packets. Need for competent managers. Willingness of some organisations to pay any amount for competent individuals. Enhanced salary structure forcing every organisation to compute return on investment on each employee or value addition of each employee.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
With all these influences, it is understandable that the corporate sector continues to focus on individual performance.The following realities indicate the need for refocusing performance management on group or team performance in addition to individual performance: Strategic thinking, employee motivation, leadership, development and team management competencies are critical at higher organisational levels and make a lot of difference. The performance management indicators are most often team performance based rather than individual performance. The team performance or output is an indicator of the individual leaders competence and there could be several cases where the team performs in spite of the leader and not necessarily due to the leader. In such cases, the team should be given adequate importance and team performance should not be merely attributable to the leader. It becomes very difficult to quantify and measure the performance of individual senior managers. Since performance indicators are qualitative and cannot be reduced to numbers, the measuring instruments fail to measure performance of managers. Managers often blame the team for poor performance. They say that they have done their best as individuals, but the team has not performed at its best. Some of them say that they have done their best but there are many factors beyond their control. Organisations have to develop team chemistry and leadership has to help make it work. Team chemistry could be managed better if team performance is focused. By focusing on team performance, the organisation is creating some enablers for the team leader to be effective. Combined performance and overall outcomes are likely to be better if the focus is on the team, rather than on the individual. Measuring team performance is easier and is more objective than measuring the individual performance at higher levels. Focusing on team performance allows tackling many dimensions simultaneously, as compared to individual performance. Team performance is always closer to the organisational performance rather than individual performance. Top level performance can be measured mainly in terms of team performance. The above considerations make it necessary to recognise the importance of team performance management besides managing individual performance.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
Q2. Explain the two psychosomatic approaches of the reward system within an organisation. Ans. The reward system within an organisation follows either of the two psychosomatic approaches towards reward. Operant Conditioning: Harvard psychologist B.F. Skinner was a master in the field of behaviorism in the late 1930s and continued his contributions through the mid-1970s. Operant conditioning is one of the key concepts of this school of psychology. Skinner called his brand of conditioning as operant conditioning, to distinguish it from classical conditioning the conditioning theory developed by the Russian physiologist Ivan Pavlov. Operant conditioning is a term used to explain behaviour, which has been encouraged by reward or discouraged through punishment. For example, if a mother wants her son to clean his room then she may give him some sweets every time he cleans it. Given an adequate amount of time, the boy will start to clean his room more frequently, since he knows that he will get some sweets in return. As a result, the boys behaviour (cleaning his room) is modified (conditioned) because he has learnt to associate that behaviour with a reward. Although this may sound similar in principle to classical conditioning (discussed below) it is in fact diverse, because operant conditioning entails actions on the part of the learner. Classical conditioning: It is a term used to explain learning, which has been acquired through experience. You are well aware that in order to learn something, you first need to experience it at the level of sensation through your five senses, as without your senses learning would be virtually impossible. For example, your friend teaches you how to play cricket. However, later you get a qualified coach who improves and changes your technique for betterment. Once an organisation rolls out the reward system, many of the antagonists of reward management and system often refer to some examples that have confirmed that rewarding can affect organisational performance negatively. For example, Heinz Company decided to pay a bonus to its managers, if they managed to improve the profits as compared to the previous year. As a result, the managers started to manipulate returns and profits by hastening or accelerating deliveries to customers. By performing this, the managers compromised on the quality of the deliverables which in turn, affected the long-term growth as well as the brand value of the company. Similarly, another example is at Maruti Suzuki mechanics working for a car repair business were rewarded according to the income produced through repairs requested by customers. As a result, mechanics started making unnecessary and pointless repairs. This led to temporary closing of all the Maruti Suzuki car repair shops in the country. The above examples illustrate that, all too frequently, organisations see rewarding as a quick fix, without investigating the possible contradictory results or sub-optimal effects, which might be inherent in some reward systems. Nevertheless, it is an established fact that a good reward system, which takes the organisational goals as well as the employees preferences into account, will certainly direct the employees to better their performance. The following is a good example: Tyco laboratories decided to have an incentive compensation plan that is directed towards improving and maintaining the commercial spirit, drive and originality of managers, who think and act like owners. To make this happen and keep the managers motivated, the company follows a tangible incentive plan, which is directly tied to each business units performance in terms of profits. This has worked very well for the company. =======================X=======================X========================= Winter Drive November 2011 Sikkim Manipal University 3

Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
Q3. Explain the Plan-Do-Review-Revise cycle of performance management. Ans. The Plan-Do-Review-Revise cycle takes place over different time scales and at many levels. Examples for many levels and different time scales would be a community, corporate, service, team, individual, and so on.

Review Do Plan Revise

The stages of Plan-Do-Review-Revise cycle depend on whether you are in an organisation and over what time-scale you are looking at. Following are the stages in the cycle: Plan: This stage: o Understands the current performance. o Prioritises the work needs to be done. o Identifies actions that need to be taken. o Plans for improvement. Do: This stage: o Ensures that the proper systems and processes are in place to support improvement. o Takes action and manages risk. o Helps people to achieve better performance. Review: This stage: o Understands the impact of your actions. o Reviews performance. o Speaks to users and stakeholders about their experience. o Gets a better picture of varying circumstances. Revise: This stage: o Uses the lessons learned from review. o Changes the future plans. o Ensures that the future action is more appropriate, effective, and efficient.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
Q4. State the components of a performance management system. Ans. Performance management is a continuous process in this unit we will discuss the cycle of performance management. A system is basically a set of interacting components. The components or parts of effective performance management system are: Performance planning: This is the process of identifying employee objectives and setting job expectations and goals for each position in the company. Each department in the company usually has different expectations for its employees based on the requirements of the positions in the department. Clearly defined expectations and goals give employees the greatest opportunity for advancing in the company. During this process managers also discuss the review and feedback process of the performance management system. Ongoing performance communication: A company is benefited by the performance management system only when there is a timely employee review and feedback system implemented in the program. Timely employee reviews and feedback sessions are dependent on the company's business operations and human resource guidelines. These review sessions will inform employees how well they are performing in their positions and what areas need to be corrected or improved. Most companies have an annual review process, although six-month reviews are often used. Performance appraisal meetings: The supervisor and the employee meet to discuss the employees performance during the appraisal period and to discuss potential goals for the upcoming appraisal period. Performance rewards: This is an important part of the performance management system. The thought of earning rewards for their actions, whether financial rewards or another form of benefit motivates employees. Usually an employee's performance review is linked with the financial bonus or pay raise, which ensures that the company gets the best performance out of each employee. Other non-financial rewards such as extra time off, special company-paid vacations, gift certificates, gifts for years of service or recognition banquets may also be offered. Performance diagnosis and coaching: Employees who do not meet the criteria standards to be eligible for performance rewards may need additional training or coaching by their superiors to improve their job skills. Performance reviews is the starting point for the additional training; subsequent performance reviews may be scheduled to check if the employee has improved from the time of the initial review. Performance management systems are ineffective if they only reward employees for good performance. The system also needs to include training or coaching processes to ensure that all company employees are able to improve their performance. =======================X=======================X=========================

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
Q5. Mr. Samuel DCosta is the HR executive at Evergreen Solutions Pvt. Ltd. He found that the performance of the marketing team has been decreasing over the past four months. Suggest measures that he can take up to improve the team performance of the marketing team. Ans. The main aim of performance management is to improve performance. This becomes the responsibility of the manager as a coach and support employees in their activities to develop their knowledge and skills. The need for coaching may arise from formal or informal performance reviews, but opportunities for coaching will emerge during the normal day-to-day activities. Every time a manager assigns a new task to an employee, a coaching opportunity is created to help the individual learn any new skills or techniques that are needed to get the job done. Every time a manager provides an individual with feedback after a task has been completed, there is an opportunity to help that individual do better next time. Coaching as part of the normal process of management consists of: o Making employees aware of their performance. o Making sure that employees are not only aware of what is expected from them, but also understand what they need to know to be able to complete the task adequately. This gives managers an opportunity to provide guidance at the outset, as guidance at a later stage may be seen as interference. o Using appropriate situations to promote learning o Encouraging people to take up higher-level issues and helping them identify how they would tackle them.

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Master of Business Administration-MBA Semester 4 Assignment - MU0016 Performance Management and Appraisal - Set 2
Q6. State the four essential components of 360 degree appraisal. Ans. The 360 degree appraisal works on four essential components: Self appraisal: Self appraisal gives a chance to the employee to compare his/her abilities, limitations, success with others and judge ones own performance. Self evaluation is an essential part of 360 degree appraisals and therefore contribution of employees to 360 degree performance systems is large and also has a powerful effect on attitude and performance. It provides a "360degree evaluation" of the employees performance and is measured to be one of the most realistic performance appraisal methods. Superior appraisal: Superiors appraisal outlines the traditional thought of performance appraisal, where the employees tasks and actual presentation is rated by the superior. This form of assessment involves the evaluation of individuals by supervisors on pre-determined parameters in an employees performance record, as well as the evaluation of team and work scenario by senior managers. The superiors (supervisors and senior managers) have the authority to change and modify an employees or a teams work on the basis of the assessment of the individual and the team. Subordinate appraisal: Subordinates feedback involves the evaluation of an individual on parameters like communication and convincing abilities, superiors ability to assign the work, team leading qualities and so on. Subordinate appraisal: Subordinate appraisal is most advantageous when developmental needs are considered. It can also be used in the evaluation of record sheets, but measures should be taken to make sure that subordinates are appraising parameters of which they have knowledge. The subordinates feedback is effective, mainly in evaluating the supervisors interpersonal skills. However, it may not be as proper or convincing for measuring task-oriented skills. Peer appraisal: Peers usually have an exclusive point of view on a colleagues job performance and individuals are generally very friendly to the idea of rating each other. Peer ratings are considered when the individuals capability is known or the result of the performance can be computed. There are both considerable assistance and serious consequences that must be cautiously considered before including this type of feedback in an all-round appraisal program. Taken as an effective developmental tool and conducted periodically, a 360 degree application can prove to be highly useful in keeping the track of alterations in others perceptions about the employees. A 360 degree appraisal is generally more appropriate at the managerial level, as it helps in evaluating their leadership and supervision styles. This method is being successfully used around the globe for improving performance. Some of the companies that have been successfully following 360 degree appraisals are TCS, Microsoft and Wipro Technologies. =======================X=======================X=========================

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