INDEX1. LEARNING OBJECTIVE2. INTRODUCTION3. OBJECTIVE OF PERFORMANCE APPRAISAL4. DEVELOPING THE PERFORMANCE APPRAISALSYSTEM5. INTRODUCING & OPERATION OF PERFORMANCEAPPRAISAL SYSTEM6. MONITORING & EVALUATING PERFORMANCEAPPRAISAL7. PROCESS OF PERFORMANC APPRAISAL8. PERFORMANCE CRITERIA9. BENEFITS OF PERFORMANCE APPRAISAL10.CONSTRAINTS11.NEW TRENDS IN PERFORMANDE APPRAISAL SYSTEM12.360o APRAISAL SYSTEM OR FEEDBACK13.NEW APPRAISAL SYSTEMS
LEARNING OBJECTIVESThis lesson is an insight into the following topics related to performance appraisal:• What is performance appraisal• What are the objectives of performance appraisal• What are the different types of performance appraisalINTRODUCTION:-Organizations are run and steered by people. It is through people that goals areset and objectives realized. The performance of an organization is, thus, dependentupon the sum total of the performance of its members. According to Peter Drucker, anorganization is like a tune. It is not constituted by individual sounds but by theirsynthesis. The success of an organization, therefore, depends on its ability to accuratelymeasure the performance of its members and use it objectively to optimize them as vitalresources.The performance of an employee is his resultant behavior on task which can beobserved and evaluated. It refers to the contribution made by an individual in theaccomplishment of organizational objectives. Performance can be measured bycombining quantity, quality, time and cost. People do not learn unless they are givenfeedback on the results of their actions. For learning to take place, feedback should beprovided regularly and it should register both successes and failures. It should alsofollow soon after the relevant action or actions. Performance appraisal system providesmanagement an opportunity to recall as well as give feedback to people. This feedbackis pertaining the performance of the worker. This helps them to correct their mistakesand acquire new skills.Performance appraisal (PA) refers to all those procedures that are used toevaluate the personality, the performance and the potential of its group members.Evaluation is different from judgment. The former is concerned with performance andthe latter is concerned with the individual. While evaluation deals with achievement ofgoals, a judgment has an undercurrent of personal attack and is likely to evokeresistance. Performance appraisal could be informal or formal. Informal performanceappraisal is a continuous process of feeding back information to the subordinates abouthow well they are doing their work in the organization. The informal appraisal isconducted on a day-today basis. For example, the manager spontaneously mentionsthat a particular piece of work was well performed or poorly performed. It is due to theclose connection between the behavior and the feedback on it, the informal appraisalquickly encourages desirable performance and discourages undesirable performance
before it becomes permanently ingrained. Therefore, informal appraisal should not beperceived merely as a casual occurrence but as an important activity and an integralpart of the organization’s culture.The formal performance appraisal occurs usually annually on formal basis andinvolves appraise and appraiser in finding answers to the following questions:1. What performance level has to be achieved during the period?2. Has it been achieved?3. What has been the shortfall and constraints?4. What are we going to do now?5. How will we know that we have done it?6. What kind of feedback can be expected?7. What assistance can be expected to improve performance?8. What rewards and opportunities are likely to follow from the performance appraisal?When the employees have this type of information, they are aware of the followingspecifications:-1. What the organization expects from them?2. What assistance is available?3. What can they expect when the required level of performance is achieved?This increases employee acceptance of the appraisal process and results in thetrust that the employee has in the organization. An environment that affords anopportunity for further growth while minimizing stressful situations certainly enhancesappraisal acceptance. Establishing this type of environment goes far beyond theperformance appraisal process. Every aspect of managing people and their work relatesto the improvement of their quality of work life. Performance appraisal is an integral partof a trusting, healthy and happy work environment that goes a long way in promotingthe same.Performance appraisal has been used for the following three purposes:• Remedial• Maintenance• DevelopmentA performance appraisal needs to cover all these three purposes with the samefocus. If any purpose predominates, the system becomes out of balance. For instance,if remedial purpose is foremost, then the performance appraisal may become adisciplinary tool, a form of a charge sheet and a tool of power instead of instrument ofevaluation. Sometimes maintenance becomes the main objective for an organization. Inthis case, the process may become short, skimped and per functionary ritual. If there is
too much emphasis on development, then the focus falls on the future assignmentrather than on the current job.OBJECTIVES OF PERFORMANCE APPRAISALPerformance appraisal serves the following management objectives:1. Providing basis for promotion/transfer/termination—Identifying those subordinates who deserve promotion or require lateralshift (transfer) or termination and can be used for career planning.2. Enhancing employees’ effectiveness—Helping employees in identifying their strengths and weaknesses. Also,informing them about the performance expected from them. This helps them tounderstand their role well and increases their efficiency at work. The feedbackreinforces good performance and discourages poor performance. This alsoinvolves identifying employee’s training and development needs. Identifyingtraining and development needs of employees is necessary to prepare them formeeting challenges in their current and future employment.3. Aiding in designing training and development programs—Identifying skills that need to be developed. This helps in tailor-makingtraining and development programs.4. Removing work alienation—Counseling employees corrects misconceptions which might result inwork alienation. Performance appraisal also helps employees in internalizing thenorms and values of the organization.5. Removing discontent—Identifying and removing factors responsible for worker’s discontentmotivates them for performing better at work. Performance appraisal helps increating a positive and healthy work environment in the organization.6. Developing interpersonal relationship—Relations between the superiors and subordinates can be improvedthrough realization that there exists a mutual dependence. This mutualdependence leads to better performance and success. By facilitating employeesto do introspection, self-evaluation and goal setting, their behavior can bemodified. Better interpersonal relationships lead to team building..7. Aiding wage administration—Performance appraisal can help in development of scientific basis forreward allocation, wage fixation, raises, incentives etc.8. Exercising control—Performance appraisal also provides a means for exercising control.
9. Improving communication—Performance appraisal serves as a mechanism for communicationbetween superiors and subordinates.DEVELOPING A PERFORMANCE APPRAISAL SYSTEMA formal performance appraisal system can provide a framework within whichappraisers and appraise can operate. A performance appraisal system can bedeveloped through a program comprising the following stages:-1. Determine overall approach to performance appraisal. The decisions on the overallapproach to introduce performance appraisal should cover the following:-(a) What are the objectives of introducing performance appraisal?(b) What benefits are anticipated from introducing performance appraisal?(c) What are the main features of the approach to performance appraisal?2. Where and how should PA be introduced?Performance appraisal is best introduced on an organization-wide basis starting atthe top. The most common and best method is to set up a project team or workinggroup for this purpose.3. Decide who is to be covered?At one time, most schemes were restricted to managers. However, performanceappraisal is now being extended to all the members of professional, administrative,technical and support staff. The decision regarding who is to be covered should bemade at the outset itself.4. Decide on whether the same approach should be adopted at each level. In mostcases, the essence of the approach is the same for all levels. The performancemeasures vary for different levels.5. Set up project team. Project teams consist of managers and other employees. Thehuman resources department or outside consultants are valuable means of gettinginvolvement and ownership.6. Define role of human resource department. The role of human resource departmentdeveloping and implementing performance appraisal system is to convince topmanagement. They need to clarify to them that its introduction can make a significantimpact on the organizational performance.7. Decide whether to use outside consultants. External consultants can be used forseeking advice and introducing performance appraisal to run training programs. Theycarry on evaluation studies including the conduct of attitude surveys. But as they arecostly, care should be taken in selecting consultants who have the required level ofexperience and expertise.8. Define performance management processes and documentation. The project team
needs to pay attention to each point against a background of an understanding of theobjectives to be attained and the culture and structure of the organization. Particularattention needs to be given to the development of rating plans and document design.When designing performance appraisal forms, the aim should be to keep them assimple and brief as possible while allowing ample “white space” for comments. It isdesirable to issue an overall description of performance appraisal system to allconcerned which sets out its objectives and methods of operation. It also clarifies thebenefits that need to be achieved for the organization and its employees.9. Pilot test. The whole PA system cannot be pilot tested because the cycle lastsgenerally for 12 months. Performance appraisal includes drawing up performanceagreements, objective setting, document completion etc. These can pilot tested. Basedon the experience gained, the system may be fine-tuned.10. Plan implementation program. The implementation program should cover thefollowing:• Date of introducing performance appraisal in the whole or different parts of theorganization• Procedure for evaluating the process• Briefing or training program
INTRODUCING AND OPERATION PERFORMANCE APPRAISALSYSTEMThe introduction of performance appraisal should be planned during thedevelopment stage. The main steps are to train everyone on performance appraisal,and once in operation, to monitor and evaluate how the system is performing inpractice.TRAININGThe importance of thorough training for both appraisers and appraise, in the skillsrequired to carry out performance appraisal effectively, cannot be overemphasized.Both parties in the performance appraisal process need guidance and training in thepreparation of the following:• Performance agreements and plans• Conducting performance reviews• Completing review formsThere is also a need to develop skills required to conduct appraisal discussions,including interpersonal skills. Training can be provided by formal courses or workshops.It is probably best to develop a series of training modules, as it might be difficult to getpeople to go through all the training required at one time. It is believed that people areunable to absorb information at one go. The modules could consist of the following:• Introduction to performance appraisal system• Defining key tasks and setting objectives• Working with attributes and competence• Preparing performance and development plans• Conducting appraisal discussions• Rating• Providing feedback• Coaching and counselingMONITORING AND EVALUATING PERFORMANCE APPRAISALIt is not only important to monitor the introduction of performance appraisal verycarefully, but it is equally vital to continue to monitor and evaluate it regularly. This helpsin correcting any drawbacks. The ultimate test, of course, is analyzing organizationalperformance to establish the extent to which improvements can be attributed to
performance appraisal. It may be difficult to establish a direct connection. However,more detailed assessment with managers and staff on the impact of the process mayreveal specific areas in which there have been improvements.DISTINCTION BETWEEN PERFORMANCE AND POTENTIALPerformance appraisal is designed to look backward in order to look forward. Thebest prediction of potential, using performance appraisal as the basis, is made when thenext job is quite similar to the previous one. But, in many cases the next job may bequite different and thus the past performance does not prove adequate as predictor offuture performance. It is important for us to clearly understand the differences betweencurrent performance and promotion potential of subordinates. As mentioned earlier,performance is the resultant behavior of the subordinate on the task which can beobserved or evaluated. Potential, on the other hand, refers to the ability of theemployees to fit into future role. Many managers default in assuming that a person withabilities to perform well in one job will automatically perform well in a more responsibleposition. It is for this reason that people are often promoted to positions in which theycannot perform adequately. This has been amply summarized in Peter’s principle. Theprinciple indicates that in any organization, everyone rises to his/her level ofcompetence. We should remember that by promoting an employee with no promotionpotential, we might lose a good worker and get a bad executive.Most performance appraisal forms have a column for potential for promotion inwhich a score is required to be filled up. Though this is supported by words, only thenumerical score is recorded for manpower planning purposes. A statement such as,ready for promotion in 10 months/years, is seen by an appraisee as a promise. Thereare many methods available for identifying potential. These include assessmentcenters, psychological tests, assignments, peer and self-assessment and actionlearning programs. Ideally, potential assessment should involve the use of more thanone technique. This is likely to result in more reliable judgment.PROCESS OF PERFORMANCE APPRAISALPerformance appraisal comprises the following steps:• Select performance factors based on the job description. These are duly evaluatedand help in setting standards for achievement• Set the performance review period• Measure actual performance• Compare performance with set standards and rate it with a suitable scale• Communicate the rating to the appraisee• Use the performance appraisal for the desired purpose
PERFORMANCE CRITERIAIn order to be effective, the criteria for performance appraisal should begenuinely related to success or failure in the job and should be amenable to objectivejudgment. It should also be easy for the appraisers to administer and appear just andrelevant to the employees. They need to strike a fair balance between sensitivity to theneeds of the present job and applicability to the organization. The earlier concept ofmerit rating has yielded place to performance appraisal. In the merit rating system, meritwas based upon personality traits such as leadership, ability to get along with others,decisiveness, creativity, industry, judgment, initiative and drive. It is difficult to apply thissystem reliably since it demands too much on the quality of personal relationshipsrather than worker’s performance. Personality measurement is somewhat dangerousbecause we usually like to quantify. The focus earlier was on “what” he is. Inperformance appraisal, the focus is shifted to “how” he performs in work-orientedactivities such as job knowledge, accuracy, clarity, analytical mind and ability to carry onoperations to their logical ends. Performance appraisal is based on competence,contribution and commitment. It is not based on chance, chemistry and convenience.Merit rating was generally used for blue-collared jobs. Performance appraisal, on theother hand, is more comprehensive and can be used for all of the following categories:• Workers• Supervisors• ManagersManagement by objective (MBO) is an example of performance based appraisalapproach that involves setting objectives and comparing performance against theobjectives. Objectives give greater freedom to both management and the employees indeciding how performance is to be measured. They also have greater motivationaleffect since the standards are discussed and agreed upon both by the management andthe employees.
BENEFITS OF PERFORMANCE APPRAISALPerformance appraisal is a formal exercise carried out for all executives and staffmembers with respect to their contributions made toward the growth of the organization.The aim is to measure the overall performance of an employee over a period of time.This is usually one year. The procedure is carried out by the immediate supervisor whoinurn provides a feedback to the employees and helps in better management.Performance appraisal does not merely measure the performance of the people but hasmany other benefits. The benefits of a successful appraisal system can be summed upas follows:1. Benefits for the appraisee are as follows:• Better understanding of his/her role in the organization. Provides answers toquestions such as what is expected and what needs to be done to meet thoseexpectations• Clear understanding of his/her strengths and weaknesses so as to develop intoa better performer in future• Increased motivation, job satisfaction and self-esteem• Opportunity to discuss work problems and how to overcome them• Opportunity to discuss aspirations and any guidance, support or trainingneeded to fulfill these aspirations• Improved working relationships with the superiors2. Benefits for the management are as follows:• Identification of performers and non-performers and their development towardbetter performance• Opportunity to prepare employees for assuming higher responsibilities• Opportunity to improve communication between the employees and themanagement• Identification of training and development needs• Generation of ideas for improvement• Better identification of potential and formulation of career plans
3. Benefits for the organization are as follows:• Improved performance throughout the organization• Creation of a culture of continuous improvement and success• Conveyance of message that people are valuedThe above benefits can be realized only if performance appraisal is consideredas a process of management. It should not become a scheme devised by the personneldepartment for managers to use in accordance with the directives of that departmentand generate completed forms which are stored away in employee’s dossiers and thenforgotten. Performance appraisal is a process for establishing sound understandingabout what is to be achieved and an approach to manage and develop people. Thishelps in increasing the probability of achieving the short-term goals and long-term goals.Performance appraisal helps management to collect data on human resources and useit for enhancing responsiveness of the organization. Since it is people who performappraisal and since people have emotions, there will always be some subjectivity.Though criterion could be stipulated, personal likings and biases are likely to influencethe evaluation. Every assessor has a price-expectation of a particular type of behavior.An appraisee, who meets it, gets higher assessment. Being subjective in nature,there are certain pitfalls which need to be guarded against. The issue of performanceappraisal is very sensitive to the appraisee because it affects his/her present position(status, and self esteem) and career growth. Performance appraisal system should notonly be fair, equitable and transparent, but it should be perceived to be so. This canhappen only if the system has in-built transparency. Some of the common pitfallsencountered in performance appraisal are mentioned below:-1. Shifting standards—Performance appraisal should be based on uniform and fair standards. Inabsence of this, the employees can get confused and the organization might not be ableto decide as to who is suitable for promotion. Let us consider a hypothetical situation. Ina given year, quality can be the criteria for performance evaluation. The boss canchange that in a current year and decides to judge the employees on the basis ofquantity of work.2. Different rater’s patterns—Managers differ in rating style. Some rate harshly whereas others are quitelenient. This can be reduced by precise definition on the appraisal form. For instance,dependability may be defined as the confidence you have in the employee to carry outinstructions and the extent to which you can rely on his/her ability, punctuality andattendance. Subjectivity can also be moderated through a multi-layer appraisal system.
In this system, the immediate superior initiates the report which is reviewed by next thehigher authority.3. Central tendency—Many appraisal forms require the appraiser to justify outstanding or poorassessments. Many of such raters may prefer an easier path of rating most people asaverage.4. First impression—Some raters may form an overall impression based on some specific qualities orfeatures of the ratee in the first meeting itself and carry it forward. Making assessmenton too short a time span and inadequate knowledge can sometimes prove incorrect.5. Latest behavior—At times, the appraisal is influenced by the most recent behavior, ignoring themost commonly engendered behavior during the entire period. Thus, a usually soberperson may be treated as arrogant because he expressed his/her opinion.6. Halo effect—Some raters have a tendency to rate high/low on all performance measuresbased on one of their characteristics. For example, an employee who is just an averagework performer but is very good in cricket and plays Ranji trophy may be given highoverall rating. One who does not shave regularly may be assessed as lazy at workplacealso. Rating employees on each of the performance measures can reduce this.7. Horn effect—Highly critical bosses have a tendency to compare performance of theirsubordinates with what they did. This is not correct because the performance alsodepends upon the situation. For example, a salesman now operates in a buyer’s marketas against the seller’s market of yesteryears.8. Stereotyping (Rater’s Bias)—Some raters have a standard mental picture about a person because of thatperson’s sex, color, caste, religion, age, style of-clothing, political view etc. Stereotypingresults in an oversimplified view. Such assessments are based on falseassumptions/feelings, rather than facts. Discretion should not become discrimination.9. Spill over effect--
This is allowing past performance to influence present evaluation. In someorganizations, when an employee reports on transfer, his earlier reports are alsotransferred along. This biases the mind of the new boss.There are other pitfalls such as taking too short appraisal interviews and failing tosupport opinions with evidence, inadequate briefing of the appraisee and pre-judgingperformance. In some organizations, such as PSUs, there is a system called CCR(Character Confidential Rol1). East India Co started this system. Since it is confidential,it can be manipulated. The corporate world soon realized its disadvantages andintroduced self-appraisal systems.CONSTRAINTSAn interaction with over 100 managers of various backgrounds in BHELhighlighted the following common constraints in implementing performance feedback,as perceived by them:-• A work culture not so conducive to proper giving and receiving of feedback• Lack of appreciation about the philosophy and benefits of performance feedback• Lack of willingness of superiors/top management in adopting this practice• Fears and apprehensions about the use of performance feedback outcomes• Confidentiality in the existing performance appraisal system• Interference by the trade unions in case of workers• Lack of proper system or procedure• Lack of accountability• Lack of clarity on role, goal, job demands etc• No direct linkages of performance feedback system with rewards or punishment• Lack of proper skill in performance analysis and giving feedback• Constraint of time availability• Personal bias and subjectivity• Non-uniformity in the criteria of performance analysis• Lack of trust and openness in people and conservativeness• Heterogeneous interest• Low motivation
• Target achievement oriented system• Non-recognition of the effort in subordinate developmentDIFFERENT TYPES OF WORK FORCE APPRAISAL SYSTEMSDepending upon who is doing appraisal, methods of performance appraisal couldbe classified into five categories:• Rating by superiors—In this system, supervisors appraise the performance of subordinates withoutinvolving the latter. This method is most commonly used in government organizations.However, it suffers from the prejudiced approach and the ability of the superiors. Thevalidity of the system can be improved by basing it on performance. The variousmethods which are used under this system are as follows:• Ranking method• Paired comparison method• Graphic rating scales method• Forced choice list method• Critical incidence method• Forced distribution method• Feedback on appraisal information—In this system, the appraisee is informed about his/her strong and weak points.The person is given an opportunity to defend himself/herself in terms of constraints orweaknesses. This system leads to greater satisfaction and higher work performancedue to participative approach. Meyer suggests that the goal of the appraisal should beto improve the future performance of subordinates and, therefore, suggested thatperformance appraisal should be made a continuous process rather than a yearlyfeature.• Field review technique—In this technique, the appraiser goes to the field (e.g. shop floor) andobtains the information about work performance of the employee by way ofquestioning the said individual, the peer group and the superiors. The informationreceived about how he is performing helps the appraiser in defining the profile of theemployee. Rating by self and the peer group-- In this method, the employee appraisalis done independently at the following three levels:
• The employee• The peer group• The superiorHRD department analyzes these appraisal reports and draws a profile based oncommon aspects. 360o performance appraisal-- This is a new concept in performanceappraisal, where the feedback is collected from all around the employee, the superior,the subordinates, the peer group and the customers. The evaluation is verycomprehensive in terms of the employee’s skills, abilities, styles and job-relatedcompetencies. This system has the following advantages:• Higher validity and reliability of the evaluation• Self-evaluation by the employees gets compared with the perception of others• Helps in maximizing employee potential in the face of challengesPERFORMANCE REVIEW SEQUENCEThe following is offered as a rough guide to the sequence of events which amanager may wish to initiate in order to ensure that nothing of importance in theperformance appraisal process has been overlooked:-(a) Agree a time and date for the review well in advance and set aside at least an hour.(b) Arrange for the location to be private and free from interruptions.(c) Bring all relevant results and information concerning the appraisee’s performance inhis area of responsibility.(d) Ask the appraisee for the following:-• To review his/her performance in the work situation point by point• About any problems which might have affected his/her performance• About the implications of any problems or events and their effect on theindividual, the team and the work• What needs to be done by either of them to help improve his/her futurePerformance(e) Decide on the key result areas.(f) Manager and appraisee should jointly set standards of performance and the courseof action for the next review period.(g) Close with a firm date for the next interim review.
NEW TRENDS IN PERFORMANCE APPRAISAL SYSTEMThe performance appraisal systems existing in companies in India have broughtforth many problems at all levels in the organizational structure. The findings of a surveyconducted by Business Today, in collaboration with a few organizations, revealed thefollowing:• Performance appraisal systems do not appear to be connected to rewards• Middle managers feel that they are underpaid• Factory workers are unhappy about their pay scales, increments, flat bonuses andunrealistic allowances.In the emerging business environment, companies are learning a new rule forbenchmarking employee performance and deciding on the rewards. Customersatisfaction, organizational prosperity and achieving the corporate goals should be theultimate arbiter to circumvent the above-mentioned problems. The appraisal and rewardsystems, designed with the above framework, attract the best people, retain them andmotivate them to give their best. Translating the corporate objectives into specific,quantifiable goals for every employee forms the corner stone of performance appraisalsystems leading to feedback on how close to or how far from those goals the employeeis at the end of appraisal period. The nature of goals emphasized by the performanceappraisal systems should not only be numbers-driven, sales or budget-oriented but alsothe methods used to achieve those numbers. This shuns the employees from puttingcompany’s values, credibility and reputation at stake. Therefore, performance appraisalsystems should focus on behavior oriented dimensions. Performance appraisal systemsshould also focus on teamwork which is increasingly gaining importance. In an age ofincreased automation, employee productivity in general and managerial productivity inparticular has to be assessed and rewarded.The potential of managers for taking on higher responsibilities, which is reflectednot just in their track record but also in their personality traits and non-function-relatedabilities, have to be appraised using methods like assessment centers. And for allthese, companies have to adopt techniques like 3600 evaluations. This prevents anemployee to be assessed exclusively by his/her superiors. Linking the form of reward tobusiness objectives helps in yielding results. This includes achieving entrepreneurialaction from the employees. Goal-linked incentive pay and stock options, which linkcompensation to profits, are good examples of this orientation. However, maturecompanies focusing and managing their earnings per share and protecting marketshare have to seek out managerial talent. They reward it with flexible and tax-friendlycompensation packages with benefits designed to improve the quality of life.Companies that are delivering find the promotion route closed due to restricted number
of vertical jumps possible within the flattened hierarchy. They are required to dismantlethe promotion mindset in their employees, equate growth with lateral movement andmove toward a designation-less structure. In this case, companies have to listen to theiremployees before finalizing the form of rewards. It is only then that the process oflinking pay packets to performance actually payoff. Some of the emerging techniques ofperformance appraisal adopted by companies like Phillips, Reckitt and Coleman, Godrejand Boyce, Glaxo, Cadbury India, and Mastek are enlisted below:1. Narrative essay- A candid statement from a ratee.2. Simple ranking- Order of rating from best to worst.3. Alternation ranking- Alternating from top to bottom of list.4. Paired comparison- Comparing rates to one another.5. Forced distribution- One-to-one comparison.6. Behavioral checklist- A descriptive rating.7. Critical incident- Evaluation based on key incidents.8. Graphic rating scale- Standardized, quantitative rating.9. BARS- Rating in behavioral terms.10. MBO- Measuring performance against results.11. Work planning review- Emphasizes process over outcomes.12. Immediate superiors- Feedback from immediate boss.13. Self-appraisal- Evaluation by ratee.14. Peer-group appraisal- Evaluation by team members.15. Upward appraisal- Evaluation by subordinates.16. 360-degree appraisal- Evaluation by boss peers and subordinates.17. Assessment centers- Assessment based on response to a battery of tests.360O APPRAISAL SYSTEM OR FEEDBACKThis is defined as the systemic collection and feedback of performance data foran individual or a group. It is derived from a number of stakeholders in theirperformance. It is done in a systematic way via questionnaires or interviews. Thisformalizes judgment coming from people and through natural interactions employeeshave with one another. There is both a collection and a feedback process. Data isgathered and fed back to the individual participant in a clear way designed to promoteunderstanding, acceptance and ultimately changed behavior. Stakeholders are peoplewho are both affected by your performance and deal with you closely enough to be ableto answer specific questions about the way you interact with them. This feedbacksystem assesses managers in terms of the competence they possess or morespecifically through the detailed behavior that constitutes them. So far, 360o feedback
has concentrated on people who are at the more senior levels in an organization. Thisincludes directors, managers, senior executives in companies and partners or principalsin the profession. However, as organizations are beginning to appreciate the power andvalue of such measurement, other jobholders find that their behavior also comes underthe microscope. Engineers, pilots, sales people, HR professionals, customer servicestaff etc., have all participated in this assessment and feedback process. Certainspecific benefits of the 360o feedback system are as follows:• Self development and individual counseling• Part of organized training and development• Team building• Performance management• Strategic or organizational development• Validation of training and other initiatives• RemunerationThe 360o feedback system can be used in any organization for the abovepurposes. It is believed that the impact of this feedback on an organization is verybeneficial. The technique presents feedback in a powerful way and can have impact onthe quantity or quality of performance data, communications, staff motivation and theroles of those involved. However, this system is not a quick process.The 3600 feedback has become popular recently because of a change in theexpectation that organizations have from their employees. This is through the increasingemphasis on performance measurement, change in major management concepts andmore receptive attitudes.NEW APPRAISAL SYSTEMSThe changing needs of the organization and the existing lacunae in theperformance appraisal systems have forced the organization to design their ownappraisal system. This system fulfills the organizational as well as individual needs. Inthis regard, various new concepts of appraisal system have come into vogue. They arebriefly discussed as follows:1. Focus on achievement system—The goal of this system is to continuously improve the performance of employeesand the organization in general. Here, each individual has primary responsibilities forhis/her performance. Therefore, the stress is primarily on development rather thanevaluation. This system is employee driven. The key role of a manager is to supportemployees to maximize their potential and achievement. Hence, this systememphasizes upon the success of the company which is enhanced through clear linkbetween corporate strategies and individual goals. The outcome of this achievement
system leads to visible changes in the organizational functioning and moving toward amore optimistic climate.2. Team appraisals—This concept focuses upon appraising the performance of the team rather thanan individual team member. The assessment of every team member is madeaccordingly. Digital Corporation USA is currently using this system. The main featuresof this system are as follows:• It involves team members in decisions affecting the team• Individuals are involved in day-to-day activitiesIt includes self-appraisal, appraisal by peers and review of performance in agroup by review committee. This prevents extensively documented job description andjob requirement reports. In the organizational setting, most people are interested inevaluating others by appraising performance. They are hardly prepared themselves tobe evaluated. Hence, it is a real challenge for HR professionals to make the appraisalsystem more pragmatic to ensure that people trust in the system. So long as a humanbeing evaluates another, there is some subjectivity in the assessment. Thus, it isessential to balance the subjectivity and objectivity in the appraisal system to make itpeople oriented, workable and productive. Moreover, the purpose of the system shouldbe more developmental rather than punitive in natures