Project Report on Performance Appraisal system at bsnl
Introduction towards Performance Appraisal System
Human
Resource (or personnel) management, in the sense of getting things done
through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division
to provide an expert service dedicated to ensuring that the human resource
function is performed efficiently.
“People
are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet, the reality for many organizations
are that their people remain under valued, under trained and under utilized.
Performance Appraisal is the process of assessing the performance and
progress of an employee or a group of employees on a given job and his /
their potential for future development. It consists of all formal procedures
used in the working organizations to evaluate personalities, contributions
and potentials of employees.
PREFACE
Managing human resources in today’s dynamic environment is becoming more and
more complex as well as important. Recognition of people as a valuable
resource in the organization has led to increases trends in employee
maintenance, job security, etc
My research project deals with
“Performance Appraisal as carried out at Bhart Sanchar Nigam Ltd. (BSNLK)”.
In this report, I have studied &evaluated the performance appraisal process
as it is carried out in the company.
The first section of my report
deals with a detailed company profile. It includes the company’s history:
its activities and operations, organizational structure, etc. this section
attempts to give detailed information about the company and the nature of
it’s functioning.
The second section deals with
performance appraisal. In this section, I have given a brief conceptual
explanation to performance appraisal. It contains the definition, process
and significance of performance appraisal.
In the third section of my
report, I have conducted a research study to evaluate the process of
performance appraisal at Bharat Sanchar Nigam Ltd.; this section also
contains my findings, conclusions, suggestions and feedback.
The forth and final section of
this report consists of extra information that I related to the main
contents of the report. These annexure include some graphs and diagrams
relating to the company, graphs relating to the research study and important
documents upon which the project is based.
Rationale Of The Study
Performance Appraisal is the
important aspect in the organization to evaluate the employees performance.
It helps in understanding the employees work culture, involvement, and
satisfaction. It helps the organization in deciding employees promotion,
transfer, incentives, pay increase.
Introduction to Human Resource Management
Human
Resource (or personnel) management, in the sense of getting things done
through people, is an essential part of every manager’s responsibility, but
many organizations find it advantageous to establish a specialist division
to provide an expert service dedicated to ensuring that the human resource
function is performed efficiently.
“People
are our most valuable asset” is a cliché, which no member of any senior
management team would disagree with. Yet, the reality for many organizations
are that their people remain under valued, under trained and under utilized.
The market
place for talented, skilled people is competitive and expensive. Taking on
new staff can be disruptive to existing employees. Also, it takes time to
develop ‘cultural awareness’, product / process / organization knowledge and
experience for new staff members.
Functions of Human Resource Management
Following are the various functions of Human Resource Management that are
essential for the effective functioning of the organization:
1.
Recruitment
2.
Selection
3.
Induction
4.
Performance Appraisal
5.
Training & Development
Recruitment
The process of recruitment begins after manpower requirements are determined
in terms of quality through job analysis and quantity through forecasting
and planning.
Selection
The selection is the process of ascertaining whether or not candidates
possess the requisite qualifications, training and experience required.
Induction
a)
Induction is the technique by which a new employee is rehabilitated into the
changed surroundings and introduced to the practices, policies and purposes
of the organization.
WHAT IS “Performance Appraisal”?
Performance Appraisal is defined as the process of assessing the performance
and progress of an employee or a group of employees on a given job and his /
their potential for future development. It consists of all formal procedures
used in working organizations and potential of employees. According to
Flippo, “Performance Appraisal is the systematic, periodic and an important
rating of an employee’s excellence in matters pertaining to his present job
and his potential for a better job.”
Characteristics
1.
Performance Appraisal is a process.
2.
It is the systematic examination of the strengths and weakness of an
employee in terms of his job.
3.
It is scientific and objective study. Formal procedures are used in the
study.
4.
It is an ongoing and continuous process wherein the evaluations are arranged
periodically according to a definite plan.
5.
The main purpose of Performance Appraisal is to secure information necessary
for making objective and correct decision an employee.
Process
The process of performance appraisal:
1.
Establishing performance standards
2.
Communicating the Standards
3. Measuring Performance
4. Comparing the actual with the standards
5. Discussing the appraisal
6.Taking Corrective Action
Limitations
1.
Errors in Rating
2.
Lack of reliability
3.
Negative approach
4.
Multiple objectives
5.
Lack of knowledge
Methods of Performance appraisal
The
foregoing list of major program pitfalls represents a formidable challenge,
even considering the available battery of appraisal techniques. But
attempting to avoid these pitfalls by doing away with appraisals themselves
is like trying to solve the problems of life by committing suicide. The more
logical task is to identify those appraisal practices that are (a) most
likely to achieve a particular objective and (b) least vulnerable to the
obstacles already discussed.
Before
relating the specific techniques to the goals of performance appraisal
stated at the outset of the article, I shall briefly review each, taking
them more or less in an order of increasing complexity.
The
best-known techniques will be treated most briefly.
Essay appraisal
In its
simplest form, this technique asks the rater to write a paragraph or more
covering an individual's strengths, weaknesses, potential, and so on. In
most selection situations, particularly those involving professional, sales,
or managerial positions, essay appraisals from former employers, teachers,
or associates carry significant weight.
.
Graphic rating scale
This
technique may not yield the depth of an essay appraisal, but it is more
consistent and reliable. Typically, a graphic scale assesses a person on the
quality and quantity of his work (is he outstanding, above average, average,
or unsatisfactory?) and on a variety of other factors that vary with the job
but usually include personal traits like reliability and cooperation. It may
also include specific performance items like oral and written communication.
Field review
The
field review is one of several techniques for doing this. A member of the
personnel or central administrative staff meets with small groups of raters
from each supervisory unit and goes over each employee's rating with them to
(a) identify areas of inter-rater disagreement, (b) help the group arrive at
a consensus, and (c) determine that each rater conceives the standards
similarly. .
Forced-choice rating
Like
the field review, this technique was developed to reduce bias and establish
objective standards of comparison between individuals, but it does not
involve the intervention of a third party.
Management by objectives
To
avoid, or to deal with, the feeling that they are being judged by unfairly
high standards, employees in some organizations are being asked to set - or
help set - their own performance goals. Within the past five or six years,
MBO has become something of a fad and is so familiar to most managers that I
will not dwell on it here.
Ranking methods
For
comparative purposes, particularly when it is necessary to compare people
who work for different supervisors, individual statements, ratings, or
appraisal forms are not particularly useful. Instead, it is necessary to
recognize that comparisons involve an overall subjective judgment to which a
host of additional facts and impressions must somehow be added. There is no
single form or way to do this.
The
best approach appears to be a ranking technique involving pooled judgment.
The
two most effective methods are alternation ranking and paired comparison
ranking.
1.
“Alternation ranking”:
Ranking of employees from best to worst on a trait or traits is another
method for evaluating employees. Since it is usually easier to distinguish
between the worst and the best employees than to rank them, an alternation
ranking method is most popular. Here subordinates to be rated are listed and
the names of those not well enough to rank are crossed. Then on a form as
shown below, the employee who is highest on the characteristic being
measured and the one who is the lowest are indicated. Then chose the next
highest and the next lowest, alternating between highest and lowest until
all the employees to be rated have been ranked.
2.
“Paired-comparison ranking”:
This
technique is probably just as accurate as alternation ranking and might be
more so. But with large numbers of employees it becomes extremely time
consuming and cumbersome.
Both
ranking techniques, particularly when combined with multiple rankings (i.e.,
when two or more people are asked to make independent rankings of the same
work group and their lists are averaged), are among the best available for
generating valid order-of-merit rankings for salary administration purposes.
Assessment centers
So
far, we have been talking about assessing past performance. What about the
assessment of future performance or potential? In any placement decision and
even more so in promotion decisions, some prediction of future performance
is necessary. How can this kind of prediction be made most validly and most
fairly?
360 Degree Feedback
Many firms have expanded the idea
of upward feedback into what the call 360-degree feedback. The feedback is
generally used for training and development, rather than for pay increases.
Most 360 Degree Feedback system
contains several common features. Appropriate parties – peers, supervisors,
subordinates and customers, for instance – complete survey, questionnaires
on an individual. 360 degree feedback is also known as the multi-rater
feedback, whereby ratings are not given just by the next manager up in the
organizational hierarchy, but also by peers and subordinates. Appropriates
customer ratings are also included, along with the element of self
appraisal. Once gathered in, the assessment from the various quarters are
compared with one another and the results communicated to the manager
concerned.
Another technique that is useful for coaching purposes is, of course, MBO.
Like the critical incident method, it focuses on actual behavior and actual
results, which can be discussed objectively and constructively, with little
or no need for a supervisor to "play God."
Advantages
Instead of assuming traits, the
MBO method concentrates on actual outcomes. If the employee meets or exceeds
the set objectives, then he or she has demonstrated an acceptable level of
job performance. Employees are judged according to real outcomes, and not on
their potential for success, or on someone's subjective opinion of their
abilities.
The guiding principle of the MBO approach is that direct results can be
observed easily. The MBO method recognizes the fact that it is difficult to
neatly dissect all the complex and varied elements that go to make up
employee performance.
MBO advocates claim that the
performance of employees cannot be broken up into so many constituent parts,
but to put all the parts together and the performance may be directly
observed and measured.
Disadvantages
This approach can lead to
unrealistic expectations about what can and cannot be reasonably
accomplished. Supervisors and subordinates must have very good "reality
checking" skills to use MBO appraisal methods. They will need these skills
during the initial stage of objective setting, and for the purposes of
self-auditing and self-monitoring.
Variable objectives may cause
employee confusion. It is also possible that fluid objectives may be
distorted to disguise or justify failures in performance.
Benefits of Performance Appraisals
- Measures an employee’s
performance.
- Helps in clarifying,
defining, redefining priorities and objectives.
- Motivates the employee
through achievement and feedback.
- Facilitates assessment and
agreement of training needs.
- Helps in identification of
personal strengths and weaknesses.
- Plays an important role in
Personal career and succession planning.
- Clarifies team roles and
facilitates team building.
- Plays major role in
organizational training needs assessment and analysis.
- Improves understanding and
relationship between the employee and the reporting manager and also helps
in resolving confusions and misunderstandings.
- Plays an important tool for
communicating the organization’s philosophies, values, aims, strategies,
priorities, etc among its employees.
- Helps in counseling and
feedback.
Rating Errors in Performance Appraisals
Performance appraisals are
subject to a wide variety of inaccuracies and biases referred to as 'rating
errors'. These errors can seriously affect assessment results. Some of the
most common rating errors are: -
Leniency or severity:
- Leniency or severity
on the part of the rater makes the assessment subjective. Subjective
assessment defeats the very purpose of performance appraisal. Ratings are
lenient for the following reasons:
a)
The rater may feel that
anyone under his or her jurisdiction who is rated unfavorably will reflect
poorly on his or her own worthiness.
b)
He/She may feel that a
derogatory rating will be revealed to the rate to detriment the
relations between the rater and the ratee.
c)
He/She may rate leniently
in order to win promotions for the subordinates and therefore, indirectly
increase his/her hold over him.
Central tendency:
- This occurs when
employees are incorrectly rated near the average or middle of the scale. The
attitude of the rater is to play safe. This safe playing attitude stems from
certain doubts and anxieties, which the raters have been assessing the
rates.
Halo error: -
A halo error takes
place when one aspect of an individual's performance influences the
evaluation of the entire performance of the individual. The halo error
occurs when an employee who works late constantly might be rated high on
productivity and quality of output as well ax on motivation. Similarly, an
attractive or popular personality might be given a high overall rating.
Rating employees separately on each of the performance measures and
encouraging raters to guard against the halo effect are the two ways to
reduce the halo effect.
Rater effect:
-This includes favoritism, stereotyping, and hostility. Extensively high or
low score are given only to certain individuals or groups based on the
rater's attitude towards them and not on actual outcomes or behaviors; sex,
age, race and friendship biases are examples of this type of error.
Primacy and Regency effects:
- The rater's rating
is heavily influenced either by behavior exhibited by the ratee during his
early stage of the review period (primacy) or by the outcomes, or behavior
exhibited by the ratee near the end of the review period (regency). For
example, if a salesperson captures an important contract/sale just before
the completion of the appraisal, the timing of the incident may inflate his
or her standing, even though the overall performance of the sales person may
not have been encouraging. One way of guarding against such an error is to
ask the rater to consider the composite performance of the rate and not to
be influenced by one incident or an achievement.
Performance dimension order:
- Two or more
dimensions on a performance instrument follow each other and both describe
or rotate to a similar quality. The rater rates the first dimensions
accurately and then rates the second dimension to the first because of the
proximity. If the dimensions had been arranged in a significantly different
order, the ratings might have been different.
Spillover effect:
- This refers lo
allowing past performance appraisal rating lo unjustifiably influence
current ratings. Past ratings, good or bad, result in similar rating for
current period although the demonstrated behavior docs not deserve the
rating, good or bad.
ROLES IN THE
PERFORMANCE APPRAISAL PROCESS
a)
Reporting Manager
Ø
Provide feedback to the
reviewer / HOD on the employees’ behavioral traits indicated in the PMS
Policy Manual
Ø
Ensures that employee is
aware of the normalization / performance appraisal process
Ø
Address employee concerns
/ queries on performance rating, in consultation with the reviewer
b)
Reviewer (Reporting
Manager’s Reporting Manager)
Ø
Discuss with the reporting
managers on the behavioral traits of all the employees for whom he / she is
the reviewer
Ø
Where required,
independently assess employees for the said behavioral traits; such
assessments might require collecting data directly from other relevant
employees
c)
HOD (In some cases, a
reviewer may not be a HOD)
Ø
Presents the proposed
Performance Rating for every employee of his / her function to the
Normalization committee.
Ø
HOD also plays the role of
a normalization committee member
Ø
Owns the performance
rating of every employee in the department
d)
HR Head
Ø
Secretary to the
normalization committee
Ø
Assists HOD’s / Reporting
Managers in communicating the performance rating of all the employees
e)
Normalization Committee
Ø
Decides on the final bell
curve for each function in the respective Business Unit / Circle
Ø
Reviews the performance
ratings proposed by the HOD’s, specifically on the upward / downward shift
in ratings, to ensure an unbiased relative ranking of employees on overall
performance, and thus finalize the performance rating of each employee
KEY CONCEPTS IN PMS
In order to understand the Performance Management System at BHARTI, some
concepts need to be explained which play a very important role in using
the PMS successfully. They are:
Ø
KRA’S (KEY RESULT AREAS):
The performance of an employee is largely dependent on the KRA score
achieved by the employee during that particular year. Thus, it is necessary
to answer a few basic questions i.e.
o
What are the guidelines for setting the KRA’s for an employee?
o
How does an employee write down his KRA’s for a particular financial year?
o
KRA’s: The Four Perspectives.
o
How is the KRA score calculated for an employee on the basis of the targets
sets and targets achieved?
Ø
BEHAVIORAL TRAITS:
Some of the qualitative aspects of an employees’
performance combined with the general behavioral traits displayed by the
employee during a year constitutes his behavior traits. An employee is
assigned the rating on the basis of the intensity of the behavior displayed
by him. They play a very important role in the deciding the final
performance rating for an employee as is even capable of shifting the rating
one level upwards/downwards.
Ø
BHARTI 2010 LEADERSHIP COMPETENCY FRAMEWORK:
This competency framework is a simple and structured way to describe the
elements of behaviors required to perform a role effectively. This framework
also tries to assess the performance of an employee objectively.
Ø
THE PERFORMANCE RATING PROCESS:
The rating process tries to explain the four different types of rating that
an employee can achieve i.e. EC, SC, C and PC. It also explains the
criteria, which is considered for awarding any of these ratings to the
employee.
Ø
PROMOTION AND RATING DISRTRIBUTION GUIDELINES:
The promotion and normal distribution guidelines provide the framework
within which the performance appraisal process has to work. It is very
important that the HR department pays due attention to these guidelines
while preparing the bell curves for various functions and the consolidated
bell curve for all the functions. These guidelines also help in deciding
upon the promotion cases in a year.
Performance
Rating Process
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-
Versatile in his/
her area of operation
-
Develops creative
solutions and require little / minimal supervision
-
Sets examples for
others
-
Take ownership of
own development
-
Coaches others
-
Demonstrates
business initiative
-
Is self motivated
-
Supportive team
player
-
Leads own team
very effectively
-
Demonstrate
functional initiative
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