PERFORMANCE

MANAGEMENT
SYSTEM IN INDIA
Anushree Gupta (108I08)
Khyati Khemka (108I04)
Mayank Raturi (108J53)
Sameer Chawla (108J31)
Akshita Saxena (108)
Introduction to Performance
Management

Yoder: “Performance Appraisal

refers to all formal procedures used
in working organizations to evaluate
personalities and contributions and
potential of group members”.
 Meaning
Performance Appraisal is a process supporting
the use of human resource in an organization.
It is possibly management’s most powerful tool
in controlling performance and productivity of
human resources in the organization.
Used effectively, it can have tremendous
strategic potential for governing employee
behavior and in turn, organization’s direction
through its dynamic links to selection, training,
career-path planning and reward systems.
Appraisal Practices in India

Rao (1982) conducted a survey of appraisal practices of 45

organizations. Observations:

 50% organizations-regulating employee behavior and developing

employee capabilities
 30% organizations-only controlling and regulating employee behavior
 10% organizations-development purposes

The survey revealed some interesting practices being followed in these

organizations:

 Appraisal of a person falling under the category ‘outstanding’ should be

accompanied by a brief citation of the individual’s performance
 The final ratings are given by an officer three levels above the appraisee
Appraisal forms for workers and staff are
simple (one page). Lengthy for officers and
managers
A ‘merit award’ system operates for those whose
performance is praiseworthy
Ratings are given for various qualities in a
printed form
First assessment is finalized by the reporting
officer after discussions with the appraisee. Then
sent to the head of the division who sends it to
the divisional director
The senior managers of the company are
expected to give a minimum of four objectives
per year and plans as to how they will be
achieved
 PERFORMANCE MANAGEMENT
SYSTEM AT GRASIM INDUSTRIES
TRADITIONAL METHOD:
a) Supervisors used to rate the employees.
b) Time consuming, lot of paper work- Logistical
Nightmare

CURRENTLY USED METHOD:

In the year 2001 Grasim outsourced its HR system to a
company named ICOMM.
c) Appraisals are done online. Employee-Appraiser
communications are also maintained online.
d) All the users were empowered independently using
separate Login ID's to maintain complete
confidentiality during the process.
 ANALYSIS OF THE
PERFORMANCE MANAGEMENT
SYSTEM
BENEFITS:
 Time saving
 Can easily differentiate between poor performers and
good performers
 Helps in forecasting budgeting for the next year.

DRAWBACKS:
 Though the system is doing well but since everything is
standardized so it can lead to less consideration of human
factors. HR as a human science can lose its significance.

SUGGESTIONS:
 Rather than making the whole process completely
technical, monitoring of the process can be done by
skilled experts such that it becomes less time consuming
and takes special cases into consideration.
 Appraisal systems in banks
 Traditional approach: (assessment)
1. General Intelligence
2. Job knowledge
3. Initiative and resourcefulness
4. Supervision
5. Business capacity
6. Ability to access sound business propositions
7. Dependability
8. Employee relationship
9. Public relationship
10. Appearance, conduct and manners
11. Significant achievements etc
 Modern approach
 Performance related as well as trait based
appraisals.
 Identification of strengths and weaknesses.
 Laid stress on the use of self appraisal and 360
degree feedback.
 Allahabad bank developed a system for
appraisal in the following areas of assessment:
1. Job performance
2. Job knowledge / skills and personal
characteristics
3. Potential ability and development.
 Punjab National Bank
 HR Perspectives:

1. PNB Pariwar
2. Mission-Committed work force
3. Emphasis on ethical conduct
4. People Soft
 PMS in PNB
Development Oriented Appraisal.
The company follows a Self Appraisal Method,
which is then assessed rated) by the senior
authority, and then goes to the higher authorities
for the sanction.
Appraisal is done on the Achievement Figure
Indicator, which includes business indicators like
deposits, advances.
In addition to this performance appraisal
breakup is also based on various other activities
like Sanction overdue for renewal, No. of
complaints outstanding, no. of offices visited, no.
of villages adopted (in case of rural schemes
which the bank launches)
 EXPERIENCES OF THE LAST
DECADE
Changes in performance appraisal
system at Eicher reflect maturing of
the HR function with emphasis on
quality, teamwork & process of
development. Current system has
moved away from trait-oriented
subjective system to an objective form.
Appraisal system at TELCO is MBO
based & process is mostly closed.
 The SAIL system of appraisal includes self
appraisal, primary grading, performance
review committee & development plan.

UTI has an appraisal system whose aim is to

develop boss-subordinate relationship.
It broadly has three parts:
Focus on self appraisal of performance
Focus on confidential aspect of potential
Review of appraisal
At MODI Xerox, performance planning &
appraisal is based on the RRO’s which are
filled for every appraisee.

The 4 goal areas taken are :

Customer satisfaction
Employee satisfaction
Business results
Quality
 In the area of performance
appraisals, the movement from a
top-down approach to a completely
employee centered approach is
almost complete with the realization
that the appraisee is the most critical
component of any performance
appraisal system.
 MANAGERIAL PREFERENCES AND
ATTITUDES TO APPRAISALS

Surveys conducted seeking the opinions and

preferences of managers indicate that
managers themselves are interested in open
appraisals systems.
Another survey conducted in 1978 showed
that 98% of 588 officers surveyed felt that
the appraisal system should help recognize
their strengths and weakness.
•This open appraisal system of the kind was
introduced on an experimental basis. A year
after introducing the new system a second
survey was conducted to assess the opinions
of officers.
•About 63 % stated that they were willing to
show the full report to their appraisees.
•84% of them preferred to have
performance review discussion.
•53% of them preferred trait-based
assessment of their subordinates.
Kulkarni, Nangia and Prakasam(1980) of the National Institute
of Bank Management conducted a nation wide opinion survey of
the bank employees on various personnel issues.

•Only about 14% of the employees stated that they were

aware of the basis on which their supervisor evaluated
their work in annual confidential reports.
•Remaining 55% had no idea at all of the criteria used,
33% had some general idea.
•68% felt that data filled in annual confidential reports
do not focus on the job performance.
•73% felt that the appraisee should be interviewed about
his performance and given opportunity to provide inputs
for his performance assessment.
 Appraisal Methods Of Wipro
e-performance management
PCMM( People Capability
Maturity Model)
Identification Of Star performers
Intensive training programs
Quarterly and half yearly
performance appraisal
Wipro Employee Stock Option Plan
(WESOP) allows employees to share
in the companies success
 GENERAL TRENDS
•A sizeable number of private and public sector
organizations continue to follow trait-based,
confidential formats of performance appraisal.
•Almost all them are dissatisfied with such forms
of appraisals, particularly for assessing their
managers.(dissatisfaction arises mainly from :
high subjectivity in appraisals, lack of correlation
with job-related factors, the appraisee not having
an opportunity to project his performance etc)
•With increased recognition being given to the
personnel function, a few organization have
already begun to experiment with new systems of
appraisals.
A large number of executives including those at
senior level see the role of developing HR as
mainly that of personnel or HRD department.
This lack of recognition prevents most executives
from effective use of development-oriented
appraisal systems.
In some originations the symbols are taken more
seriously than the purpose or the spirit behind
these. Personnel departments are still struggling
to overcome such problems.
Managers want open systems of appraisals
and personnel departments are still
struggling to find appraisal models suitable
for their organizations.
FUTURE OF PERFORMANCE
APPRAILS
Great degree of awakening taking place in the
managerial world about potential uses of
performance appraisals.
Unlike west where training is perceived as the most
important mechanism of developing employees, in
India appraisal systems are being recognized as an
equally potential tool for development.
In coming years there is likely to be more and more
experimentation with new appraisal systems that
contribute to improvements in the quality of work
life as well as to the development of human
resources.
 SUGGESSTIONS
 Role Descriptions : Organizational roles and functions must
be defined clearly. To this end, job descriptions must be
prepared for each job.
 Qualities needed to perform the roles : Based on job
descriptions, the roles to be played by people must be
prepared (i.e. technical, managerial jobs and behavioral
dimensions).
 Rating mechanisms : Besides listing the function and
qualities, the potential appraisal system must list
mechanisms of judging the qualities of employees such as : i.
Rating by others, ii. Tests, iii. Games and iv. Records.
 Organizing the system : After covering the above
preliminaries, the HR manager must set up a system that
will allow the introduction the scheme smoothly
incorporating answers to some complex questions.