71

ARTICLE REVIEW

01. Article: “ Meaningful process or form-filling exercise? ”

a) About the Article:

The above-mentioned article is written by Jessica Caplan of China

STAFF. It appeared in the issue of „Human Capital‟ for the month

of August 2004 (Vol.8, No.3), at Pages 44 to 48. Human Capital

gets published by HR Information Services, M-64, 1st Floor, Lado

Sarai, Old.M.B. Road, New Delhi: 110 030. This article was first

published in China STAFF, CCH Asia‟s HR Journal for China &

Hongkong. China STAFF is a part of CCH Asia‟s expanding HR

range of publications for the Asian Region.

b) Author’s Contribution in the Subject:

Performance Management Systems (PMS) are widely

recognized as a key business strategy for driving strong business

results. At Multinational Companies, such systems are deeply

ingrained in the culture. How do MNCs ensure that their PMS

are meaningful processes and not merely form-filling exercises?

Author has written a Report on successful Performance

Management Strategy and implementation.

Based on the survey made by Development Dimensions

International (DDI) in the year 2003, on the development of

Performance Management practices in China, MNCs in china

were leading the way in establishing and investing in PMS. The

features of PMS at various MNCs are similar, entailing quarterly

reviews between Managers and Employees, annual goal setting,

quarterly review of achievement of goals and annual

72

performance review; according to which salary and bonus

decisions are made.

Author, based on the survey, has mentioned in the article that, if

Performance Appraisal is done in the form of regular coaching

and review between Managers and subordinates through the

year, employees are more likely to accept it as “ Communication

rather than Criticism”.

Author further says, given the importance of feedback and

communication in PMS, the success of any PMS lies squarely in

training the company‟s Managers. Managers must possess the

skills and know-how to review and coach staff, oversee staff

development and communicate the right messages about the

Company‟s PMS.

First and foremost, Managers must learn to fairly evaluate people

and communicate the employees that meeting goals and

expectations is the norm. Since Performance Review ultimately

impacts pay-related decisions, a universal challenge of PMS is

ensuring that people feel they are being rewarded for their

performance in terms of equity and fairness.

Managers have to ensure that individual‟s goals align both with

the goals and strategy outlined at the company‟s values. When

reviewing the achievement of goals, Managers must also

consider whether employee compromised any of the company‟s

values in the process of achieving these goals.

c) How it is useful for current Research:

The article gives detailed step-wise procedure for

meaningful process of PMS i.e. Quarterly Review, Annual

73

Goal Setting, Quarterly Review of Achievement of Goals,

Annual Performance Review, for taking decisions about

salary and bonus.

Article further narrates the very important role of Manager

(Reviewer / Appraisor) to perform for effective and

meaningful PMS in the Organisation. Those are mainly to

fairly evaluate people, communicate to employees that

meeting goals and expectations is the norm, coach staff,

oversee development.

Top Management has to ensure the quality of the system

and that Managers are doing their job.

It is interesting to observe that the implications for PMS

have no cross-cultural limit because as observed by the

Author, even in China which is a economic power to

reckon with, has similar situation.

From all the above aspects, Researcher could understand

how PMS is required to effectively implement for driving

strong business results, like at MNCs wherein such systems

are deeply ingrained in the culture. Researcher is able to

formulate his questionnaire accordingly in judging Top

Management‟s involvement in the activity, as well.

74

02. Article: “Innovations in Performance Management”

a) About the Article :

The article on “Innovations in Performance Management” is

written by Dr. Suvarna Sen, who is a faculty Member of ICFAI

Business School, Salt Lake City, Kolkatta. This article appeared

in the issue of „Personnel Today‟ for the quarter of April-June

2006 (Vol. XXVII, No.1) at Page No. 19 to 25. „Personnel

Today‟ gets published by Executive Director for NIPM, 45,

Jhowtala Road, 1st Floor, Kolkatta-700 019.

b) Author’s Contribution in the Subject:

The Author believes that Managers are not born effective, they

become effective. Managers have to work continuously to stay

effective in each situation that they manage and Managerial

Effectiveness is a progressive attitude, not a destination. Each

step forward, this attitude gives one an experience of success,

even if a small one. A perceptive Manager looks for a

cumulative effect of these successes – his/her professional

growth. Once an individual Manager develops this attitude, this

approach to life, it begins to act as a driver – and she/he

becomes self-driven, author adds.

Self-driven Managers emphasise learning how to learn. They

learn from the realities of their professional life and fashion

themselves through their own concrete experience. They build

their skill-box through encounters with people and problems.

These self-driven Managers take calculated risks, look for

causes of their success and make these causes the core of their

self-development strategy. They build systems that provide

them their benchmarks and bearings. Performance (PfM)

75

System can help the Manager achieve a patently difficult, but

obvious aim. PfM provides an efficient option for an

implementing system. PfM begins by understanding the

Organisational, the departmental, the unit or the project goals

for the year.

Author, further expresses that PfM, on the other hand, enables

Managees to perform better in order to succeed. This means

creating a motivating work environment through appropriate

incentives, feedback and rewards : encouragements for wanting

to do a better job. This also means innovations in leadership

and an overall organizational climate that exudes optimism and

high performance expectations without underplaying

organizational limitations, obstacles and constraints.

Author elaborates that PfM is another way of envisioning the

totality of a Manager‟s function. It views the Managerial function

holistically – not a random collection of activities that most

Managers recognize and undertake as their core function. PfM

provides a systemic dimension to the Managerial Activities –

highlighting their mutual inter-relatedness and interdependence.

Any system needs certain pre-requisites to function smoothly.

PfM becomes easier to do and more productive to the extent

that :

o It is used holistically, as a system.

o The relevant sub-systems are in place and accepted.

o The Organisation‟s philosophy and human environment

is conducive to high morale.

o The Manager is oriented to, and equipped with high

performing attitudes and leadership skills.

76

The Manager‟s success must reflect in the Organisation‟s

bottom-line in terms of fulfillment of its planned goals. The

following insights can be provided to effective practice of

PfM.

o Clarify Organisational goals.

o Translate Organisational goals into individual, team,

department and divisional goals.

o Improve performance over a period through a continuous

and evolving any process.

o Rely on consensus and co-operation rather than control

or coercion.

o Encourage self-Management of individual performance.

o Promote open and honest leadership styles that

encourage a two-way communication between the

Managers and the Managees.

o Ensure continuous feedback.

o Generate feedback loops that enable the experiences

and knowledge gained on the job by individuals and

teams to influence organizational objectives.

o Monitor and measure all performance against jointly

agreed goals.

o Apply to all Managees.

o Don‟t limit linking performance only to financial reward.

The following Flow-chart abstracts the PfM Process as it evolves

in an Organisation.

77

Figure 3.5: Performance (PfM) Process

Since PfM attempts to improve the quality of collaboration

among people in the Organisation, role-wise performance

plans and expectations must flow from both.

Author further narrates that the rationale for establishing a PfM

system does and must emerge from the Manager‟s concerns

and interests. To be more effective, this process must start

with identification and analysis of the Manager‟s Performance

problems and related Management skills; in the context of the

specific organization. Some examples of such problems are :

a) Remedying poor performers and performance.

b) Bridging gaps in performance expectations.

c) Securing equitable rewards and punishment

decisions from the Organisational Management.

d) Softening performance pressure through

Organisational Mission, Goals,

Strategy and Operational Plans

Individual Role and its Description, Indices for

Monitoring Performance,

Performance Standards

Role-wise Plans and

Expectations

Feedback

Stocktaking

Monitoring & Mentoring

Activity

78

appropriate planning, scheduling and delegation.

c) How it is useful in current research :

After going through the article, the basic concept of

Performance Management system was very well understood

as Author has explicitly elaborated its objectives, process and

importance.

It is also very clear that PfM is Managers‟ concerns and

interests. It is a formal review process designed to define,

encourage, recognize and reward high performance. PfM is

an effective intervention in strategy planning of the

Organisation. The system provides a basis for rewarding

positive performance and remains a key mechanism for

determining which all employees should move to higher

layers of training.

While carrying out study and survey in selected organizations,

the existence of the following critical components pertaining to

PfM could be assessed :

i) Whether it develops, publishes and educates

employees about the skills and standards necessary

for each position.

ii) Whether it produces, once or twice a year, written

formal evaluations of employee performance against

established standards.

iii) Whether it is structured to help reward employees

according to performance.

79

While surveying, the following aspects would also be

examined for more effective PMS.

A formal, written, timely review process linked to

development planning,

Frequent feedback between evaluations,

Personal development plans that tie directly to skills

needing development,

Employee rewards and promotions linked to

evaluation processes and,

Enough flexibility to allow skills to be revised when

job skills and job and firm objectives change.

The assessment of above attributes in connection with the

Performance Appraisal Activity in all the selected

Organisations would be made during the study, to

understand the effectiveness of Performance Appraisal

System in every Organisation.

80

03. Article: “ Does your Appraisal System work ? ”

a) About the Article:

The article written by Shyamal Majumdar and Tarun Narayan,

appeared in the issue of „Indian Management‟ – The Journal

of the All India Management Association, for the month of

May 2005 (Vol. 44 Issue 5), at pages 19 to 30. „Indian

Management‟ is a Business Standard Publication, getting

published from Nehru House, 4, Bahadur Shah Zafar Marg,

New Delhi – 110 002.

b) Authors’ contribution in the subject :

Authors, in this article, had compiled the details of interviews

of various eminent personalities in the area of HR, in

connection with the Performance Appraisal Systems in Indian

Organisations.

Authors say, sophisticated your appraisal system is, at the

heart of a good performance appraisal scheme is the

manager‟s ability or willingness to give people not just good

news but the news about their weaknesses that they don‟t

know. HR Consultant always says, “ It is in our Dharma that

we all want to be nice guys at the end of the day and take

refuge in an extensive form-filling exercise. ” He further says,

“Most managements go through the motions of this „annual

ritual‟ and treat it as nothing more than an exercise to fill up

countless forms. The middle managers already know the kind

of increments that the top management would allow and tailor

their appraisals to justify the pre-determined increments.”

81

After going through the contents of the interviews, the

following important observations and comments thereof, have

been well narrated in the article :

(1) Using appraisals for salary increases is a problem for

many reasons. Money clouds the open dialogue between

a manager and an employee. While Managers are

focusing on performance, Employees are focusing on

how much money this is going to mean in their pocket.

Also, Managers are often forced to be dishonest on

appraisals in order to ensure that the Employee gets

something. They would like to avoid the inevitable

confrontation associated with telling an Employee that he

merited no increase.

(2) Some Consultants blame it on Top Managements‟

obsession with the „Bell Curve‟. This theory says most

Employees are in the middle as far as performance is

concerned. There is a bunching of excellent performers

at the Top and the worst cases (the bottom 10%), at the

other end. Managers have to keep this broad picture in

mind, when they rate their team members. HR

Consultants say this sort of artificial structural rigidities

often lead to a huge number of demotivated people in an

organization.

(3) The two most popular forms of appraisal are the 360o

feedback and upward assessment. Rather than having a

single person play judge (The Boss), a 360o appraisal

acts more like a Jury. The biggest benefit of the 360o

feedback is that it helps discover whether an Employee is

an effective performer in all interactions – or whether the

82

worker is simply an effective performer when the boss is

around. The main problem that the 360o method faces is

that it does nothing to reduce the fears that people have

about a group of anonymous people determining their

raises, promotions and standing,

c) How it is useful for current Research :

After going through the article, it is well understood that what

are the main hurdles, generally observed in Indian

companies, in carrying out the Performance Appraisal System

effectively and how to overcome those. Some of the

problems/hurdles are as under :

There is no courage to reward somebody who takes a

very tough target and misses it by 10%, however, it is

always seen that courage appears in rewarding

somebody who takes a soft target and exceeds it by

10%.

Giving honest and direct feedback to the Appraisee by

Appraisor is still a problem. Most Manager (Appraisors)

hesitate to give negative feedback to their Juniors

(Appraisees) as they lack the coaching skills necessary

for the purpose.

Companies assess people in a certain way at the time of

hiring but differently at appraisal time, which makes the

process very uncertain.

Many times, Appraisal systems also fail as goals and

performance metrics are often not clearly defined. Goals

are also not aligned to all the departments and functions

83

of an organization, as a result of which there is no

ownership of certain crucial goals in certain departments.

If one looks into these problems wholeheartedly,

Appraisal System will definitely lead / tend to give more

positive and meaningful results.

84

04. Article: “ Beware : Curve Fitting Performances Can Create

Dysfunctional Ripples”

a) About the Article:

Mr. Tushar Khosla, the author of the above mentioned article

is a Management Consultant working in the area of

Organisation Restructuring and Institutional Strengthening.

This article appeared in the issue of „Indian Journal of

Training and Development (IJTD)‟ for the quarter : April-June

2005 (Vol.XXXV No.2). „IJTD‟ gets published by Air Comdr,

Amrit Lal, VSM (Retd) on behalf of Indian Society for Training

& Development, New Delhi-110 016.

b) Author’s contribution in the Subject :

Author has very explicitly stated the possibilities of creating

dysfunctional ripples due to „Curve Fitting‟ practices related to

Performance of employees in the Organisation. Author says,

several Organisations who are driven by the logic –„Only a

few employees can be categorized as exceptional performers,

while the majority of employees are supposed to be delivering

near average performances,‟ adopt the Curve Fitting practice,

wherein employee performance rankings are adjusted to

reach a predefined bell shaped profile at the Organisation

level. It is often assumed that this practice would spur

improvement in overall organizational performance, by

introducing competition among employees. „Curve Fitting‟

refers to the practice of readjusting the performance ratings of

the employees within terms, groups and within the

Organisation so that macro-picture resembles a predefined

normal distribution curve that places most of the

performances as average and only a few as exceptional.

85

Assumptions behind Curve-Fitting practice :

Following assumptions seem to guide the Curve-Fitting practice.

Competition at work place improves Organisational

Performance.

Economic rationale of market place competition works

well within the work place as well.

Ideally, the performances should be normally

distributed.

Left without this dictate, Managers may appraise,

irresponsibility.

Author has elaborated the aspects which create ripples at

different levels, with suitable illustrations. He has taken into

consideration the perspectives of Appraisee ( The Relative

Winner, The Relative Looser and The Middle Lot), Appraisor.

Author specifically mentions that the Curve-Fitting practice

affects the relationship between Appraisee and Appraisor and

also makes additional demands on Appraisors‟ ability for

judgement, objectivity, transparency and discipline. Author

has also stated that Curve Fitting practice affects the

dynamics of the group formation and group performance.

Lastly, author has suggested the various measures and

strategies for bursting the above mentioned ripples, which are

as under :

Communicate logic and purpose of curve fitted

performance ranks.

86

Coach and Connect Appraisors.

Develop strategies for winners and losers.

Create opportunities for every talent to win.

Reward / acknowledge group work.

Monitor and strengthen the process.

c) How it is useful in current Research :

Unstandably, there could be no fool-proof system that deals

with defining, influencing and evaluating employees‟

performance.

After going through this article, it is understood, the certain

dysfunctional ripples, that Curve Fitting practice has the

potential to create. Same practice of Curve Fitting may differ in

their effectiveness in different organizations depending upon

the operational context and organization characteristics.

Hence, as Top Management or as Responsible Managers, it is

required to know why this particular practice has been chosen,

what are its limitations and what are our strategies to ensure

that the possible dysfunctional side effects are managed well.

The same calls for a demanding investment in terms of energy,

time and reflection. The main message of the article is – There

are no shortcuts to health – be that of individual or an

organization. Adjusting the weighing scale does not make the

fat-fit, which is what Curve Fitting practice may degenerate

into, if it is not handled properly.

87

05. Article: “ Bridging the Pay-for-Performance Gap”

a) About the Article:

„Indian Management‟- The journal of the All India

Management Association, has published this article in their

issue for the month of April 2005 (Vol.44, Issue 4) at Page

Nos. 34 to 40. „Indian Management‟ is a Business Standard

Publication, getting published from Nehru House, 4 Bahadur

Shah Jafar Marg, New Delhi; 110 002. The above article has

been reprinted - Courtesy the Hay Group, Copyright © 2004

Hay Group, Inc.

b) Author’s contribution in the Subject :

Companies know that pay should drive individual and overall

performance, but they struggle to connect the two. A study,

presented through the article, shows how these gaps can be

filled.

Through decades of consulting experience and extensive

research, the Hay Group, a global human resources

consulting firm, has identified the essential elements of

virtually all successful Performance Management

Programmes. These include :

Creating clarity around goals.

Building a culture of dialogue.

Establishing a system truly differentiated rewards.

Author explains that all the above elements are inter-

connected. Performance Management Systems and

Processes depend on clarity and commitment from the

88

leaders in an organization. Candid and frequent dialogue on

performance lets employees know where they stand and

builds a foundation for improvement. Differentiated rewards

should motivate employees to achieve outstanding

performers in a meaningful way.

Pay is extremely important to the individual and the

Organisation. Research by Hay Insight, the Hay Group‟s

Employee Opinion Research Division, reveals that

compensation is the primary reason for voluntary attrition

among high performers. Research enumerates that the loss

of high performers is extremely costly and disruptive,

including direct replacement expenses and indirect

opportunity costs. Organisations would like merit pay

increases to move top performers‟ salaries higher while

keeping low performers at the bottom. But in many cases, the

reverse happens.

Employees are skeptical about the link between pay and

performance. An Employee Attitude Survey conducted by

Hay Insight at 335 Companies worldwide found that only 35%

of employees said they believed they would earn more if they

improved their performance. It is also revealed that many

companies confuse the objectives of merit pay and incentive

pay. As a result, they pay employees multiple times for

achieving the same outcome.

Hay Group has reminded, through the article, the six

principles establishing differentiated rewards, as under :

Remember the „Management‟ in Performance

Management.

89

Money talks, so secure funding.

Differentiate rewards, not just performance ratings.

Set clear performance reward linkages.

Focus programme design: don‟t pay for the same

outcome twice.

Communicate, Communicate, Communicate

c) How it is useful in current Research :

Most organizations and people have serious questions about

the effectiveness of pay-for-performance programmes. After

going through the article, it is clearly understood that getting

managers to follow rules is generally quite easy, but getting

them to manage better requires a much more significant

commitment from the organization. It is also learnt that in the

wake of tough questions and rumblings of managers and

employees, they try tactical, simplistic changes, such as

revising the number of ratings categories, issuing edicts to

differentiate, and using forced distributions, without achieving

any meaningful change or improvement in performance.

Often these initiatives are driven by compensation managers,

who lack the clout to bring together all of the conditions

needed for a successful programme.

90

06. Article: “ Effective Performance Measurement in

Organisations.”

a) About the Article:

„Personnel Today‟, a Quarterly Publication of National

Institute of Personnel Management, has published this article,

written by Dr. K. Pradeep Kumar, in its Issue (Vol. XXVI,

No.3) for the Quarter, October-December 2005. „Personnel

Today‟ is published quarterly, at 45, Jhow Tala Road, 1st

Floor, Kolkatta –700 019.

b) Author’s contribution in the Subject :

Performance Management is the process through which

organizations ensure that employees are striving towards

organization goals. It serves as one of the means available to

organizations to gain competitive advantages. The

assumption that specification of the jobs to be performed and

the knowledge, skills and abilities required for performance

are for a job as it currently exists, and has existed in the past

and is inconsistent with the need to develop human resources

system for future. Author, therefore, says that it is essential

for specifying the types of performance that are necessary for

effective organizational functioning particularly in accordance

with the strategy.

Strategic business needs reflect Management‟s overall plan

for survival, growth, adaptability and profitability.

Both the internal as well as external factors affect the

business needs. One of the important internal factors

affecting the internal characteristic is the Human Resources.

91

Author states that there has to be a strong linkage between

Human Resources and Business Needs. Human Resource

activities can be integrating force in guiding an organisation‟s

Master strategic change. Diagnosing the strengths and

weaknesses of the Human Resources in an Organisation is,

therefore, the vital role of Management. It is, hence, essential

for proper assessment of performance of the Human

Resources to ensure organizational performance.

In many organizations, performance measurement is little

more than human resource bureaucracies with forms, files

and review layers. Many have dilated the inadequacies of

Performance Appraisal System. It has also been argued that

most performance measurement are woefully deficient and

measure performance at the individual level. Author has

specifically listed out the practices / activities followed in most

of the organizations and which are –

i) A Form Filling Formality.

ii) Ratings by a Superior.

iii) Measuring the general characteristics than

critical success factors.

iv) Performance Appraisal centered around salary

increase or upward mobility.

v) An unreliable tool and process.

vi) Assessment made by not setting standards.

Author further says that the causes perhaps stem from

company‟s culture. Culture shapes the types of organization

that evolve and the nature of social structures as they grow

and adopt. Organisational culture is the set of assumptions,

beliefs, values and norms that are shared among members.

92

Author has emphasized on Organisational Culture as it plays

vital role in Performance Measurement and in turn, helps in

achieving the strategic goals of the Organisation. Author has

explained the same by presenting a Flow Chart, in this

context, as under :

Figure 3.6: Organisational Culture

Corporate culture requires a clear vision of the Organisation‟s

future direction and the values and behaviours required to

meet and help define the implementation of organisation‟s

business strategy. The strategy determines and ensures that

Human Resource Management is fully integrated with the

strategy and performance needs of organization. HRM

strategies have to cohere across the organization at all levels

in the hierarchy for effective performance. A strong corporate

culture coupled with an appropriate performance

measurement, guided by accuracy, accountability will

culminate in achieving Strategic Goals.

c) How it is useful in current Research :

i) The process description along with the Flow Chart for

effective Performance Measurement, mentioned in the

Accuracy, Accountability

Culture Vision Value

Ethics

Strategy

HRM Strategy Philosophy Policy Program

Practices

Performance Measurement

Strategic

Goals

Performance

Measurement

Organisational Goals

93

article gave insight to Performance Management

System.

ii) It is also very clear from the article that the process of

Performance Measurement entails specifying the type

of performance that are necessary for effective

organizational functioning by developing a

performance culture, particularly in accordance with

the strategy, measuring performance accurately,

proper feedback to employee to encourage continuous

improvement.

iii) It is also noted that Top Management should develop

a corporate vision by the environment and ethical

values as it‟s action has a major impact on the

organisation‟s activities.

iv) It is imperative that Organisations should be

involvement oriented rather than leaning towards

authoritarian Management practices.

94

07. Article: “ How not to evaluate Employees.”

a) About the Article:

Mr. Guido M.J. deKoning, who is a strategic consultant for

the Gallup Organisation, Princeton, NJ; has written this

article. The same has been published in „Indian

Management‟ – the Journal of the All India Management

Association, in its Issue (Vol. 44, Issue 5).

b) Author’s contribution in the subject :

Author says that if you read most of the performance

reviews, you would be convinced that the vast majority of

companies are doing great. In one of the clientales of

Gallup, it was observed, 95% of all employees exceeded

their manager‟s expectations. In another organization,

almost all employees – with very few exceptions – received

nice year-end bonuses. Author further says that neither of

these companies are performing very well, their market

share has declined, service quality has deteriorated and they

have exceeded their budgets.

Author, therefore, warns management of such Organisation

as „Look again‟ – The operation may have succeeded, but

the patient died.

Most Performance Management Systems are significantly

flawed and do not deliver the results executives seek.

Author mentions that the three distinct components of any

Performance Management System and each of them has a

powerful impact on that system‟s effectiveness. First

component is evaluation – how can company capture,

95

quantify, measure or evaluate an employee‟s performance ?

Second, how is that performance rewarded ? Is there a

direct link between Performance & Rewards ? What range of

reward is being offered (financial, recognition, growth

opportunities, etc.)? And thirdly, what is the company‟s

employee development approach ? How the employees are

being developed and supported to deliver superior

performance ? Author explicitly states that it is also important

to review how the Performance Management System

functions within the company‟s culture and how it supports

corporate goals and strategies.

There are many ways to quantify or evaluate employee

performance. Author, vide this article reviews the four most

common methods :

i) Manager Evaluations, or the traditional performance

review conducted by an employee‟s Boss.

ii) Multi-source Feedback, such as 360 Performance

Appraisal, in which multiple constituencies – including

managers, peers, direct reports and/or customers – are

asked to evaluate an individual.

iii) Staffing Reviews, in which Management Team ranks,

evaluates and discusses a group of employees in their

organization.

iv) Objective performance outcome metrics, for which an

employee is held accountable.

96

These four approaches are not mutually exclusive, and most

companies use combinations of them as is reflected in the

following figure.

Evaluating the evaluations :

Of the many to evaluate

Employee performance, Manager evaluations and Multisource feedback are least

Effective.

- Manager Evaluations

- Multisource Feedback

(360) - Staffing Reviews

- Objective Performance Outcome Metrics

While staffing reviews

and objectives perfor- formance,Outcome Metrics are most effective.

Figure 3.7: Evaluating the Evaluation

Author has expressed his views about these evaluation systems as under :

i) Manager Evaluations : In many cases, the ratings do not

correlate in any meaningful way to measurable outcomes.

The end result is that the system weeds out top performers

while rewarding mediocre ones.

ii) Multisource feedback : e.g. 360 surveys, in which managers,

peers and subordinates rate an employee on a fairly extensive

list of attributes 360 surveys can be quite lengthy, it takes

skill to sort through and analyse the plethora of data and give

Evaluation

Development

Rewards

97

employees clear and actionable feedback. Most 360 reports

do not measure performance; they measure style. Unless

validated against actual business outcomes, they will not

deliver results.

iii) Staffing Reviews : These are Management Team Meetings in

which Managers rank, evaluate and discuss the employees in

the Organisation. As with any methodology, staffing reviews

can have some negative effects, but when they are properly

implemented, they can be quite potent. In this activity, each

participating Manager lists the names of the employees, he or

she supervises. As objectively as possible – and using a

good balance of valid performance measures – the Managers

then group those employees into three categories: Top,

Middle & Bottom performers. In the meeting, each Manager

goes through his or her list and shares the names that appear

in each category. As they discuss and justify their

classifications, others on the Management Team may

challenge the Manager when they have a different perspective

on the evaluation of an employee. The Management Team

incorporates any reclassifications and arrives at a final

grouping of the employees by their level of performance.

(Force-ranking of employees method is followed in GE, IBM,

Ford, Hewlett-Packard, Sun Microsystems etc. which is

controversial).

Staffing Review process makes it a best practice in following

three parts :

(I) Increasing Transparency

(II) Driving the development of talent

(III) Increasing accountability

98

iv) Objective Performance Outcome Metrics : Using a

measurement-based performance appraisal process is the

most objective approach to evaluating employees. One of its

significant advantages is that it makes the process predictable

for employees; they will know just what they need to do to

earn rewards. Placing the focus on objective financial,

productivity, quality, or customer outcomes is much more

useful than focusing employees on pleasing their Managers.

In well-differentiated pay-for-performance system, this range

ensures significantly greater rewards for Top Performers than

it does for Bottom Performers, which in turn helps your

company retain your Top Performers and sort out those who

don‟t perform.

c) How it is useful in current research :

Author has analysed the commonly-used Appraisal Systems in

the organizations. This article has well-reviewed the flaws

inherent in two of the most common performance evaluation

approaches and then discussed two evaluation methods those

deliver more positive results. The effectiveness as well as

lacunae in respect of various methods of Performance

Appraisal System have been stated very well in the article, the

following remarks pertaining to evaluations of evaluation

systems are well understood and could be taken into

consideration at the time of Survey.

i) When Managers control their employees‟ ratings,

employees will focus on currying favour with them. This

system rewards toadies, not high performers.

99

ii) Most 360 reports do not measure performance; they

measure style. Unless validated against actual

business outcomes, they will not deliver results.

iii) Using a measurement-based appraisal process is the

most objective approach to evaluating employees. It

makes appraisals transparent and predictable.

iv) Staffing Reviews and the use of objective performance

metrics are by no means the easiest ways to evaluate

employees. But they are by far the most effective ways

to establish a performance-driven culture that delivers

results.

100

08. Article: “ The road to peak performance”

a) About the Article:

The article appeared in the Issue of „Indian Management‟ for

the Month of October 2004 (Vol.43, Issue 10) at page nos.

between 26 and 36. This issue itself was titled as „Igniting

Performance‟ focusing on Companies seeking new answers

to challenges of employee engagement. The article is written

by Shyamal Majumdar.

b) Author’s contribution in the subject :

Author, in this article, has elaborated the aspects concerning

to the peak performance of the Companies. Author, in nut

shell, states that High Performing Companies know that the

key to improved customer retention and higher shareholder

value lies with employees. This means recruiting right, having

a flexible review system and retaining talent by ensuring high

employee involvement.

i) Recruitment :

During recruitments, companies should ensure on

evaluating some of the critical attributes needed to derive

peak performance. Companies like GE and Godrej use

detailed competency mapping for key jobs and most of

their Senior Managers have been trained in competency –

based interviewing. M/s Maruti Udyog Ltd., prefers a

„discussion and sharing approach with job aspirants rather

than Q&A sessions‟ which helps candidates feel and

understand the Maruti culture and their key expectations

from the position or role that is being offered.

101

ii) Flexible Reviews :

Since proper, fair appraisal system is at the heart of robust

organization, Companies are increasingly refining their

annual performance ranking system.

M/s Coca Cola is classifying its all employees in 5

different categories, based on their performance.

The percentage of employees in these categories is

defined and is, as under, in ascending order of

performance.

(Lowest) 5%, 10%, 55%, 25% and 5% (Top)

Variable pay in prescribed percentage alone can

exceed every year based on the above categories.

The lowest performers 5% employees are treated

with kid gloves initially, which means trying to find

out why someone has failed and whether the

Company can help him in any way.

At GE India, the entire appraisal process has been

named for some strange reason – as Session C.

This review mechanism forces detailed

measurements, not only on performance of the

people but also the alignment between how the

Company rates its employees and how it rewards

them while supporting the overall goals of the

business.

At Infosys, role-based performance measures are

set and the tasks and competencies are evaluated

as per the role. An objective and rigorous process is

102

followed to arrive at a relative rating which is aligned

to the reward system. Appraisal process has been

customized to the different career streams.

At LG, the appraisal process sits on performance,

not potential. LG‟s Annual Appraisal Rating System

has three parameters – performance, attitude and

knowledge. The weightages to performance @ 70%

and 50% are given to Senior and Junior

Management respectively and hence the higher you

go up the hierarchy, you have to perform that much

more.

At Alcatel, they concentrate on action planning for

subsequent employee development and on

identification of potential for future growth.

The leading practitioners of rank and yank method

abroad include Microsoft, GE, Ford, Cisco, Sun

Microsystems etc., have the following new but

controversial appraisal system. – Senior Managers

of every department have to compulsorily rank

employees in a 20:70:10 ratio. While the Top 20%

are the high fliers who must be retained at all costs,

the Middle 70% are the standard performers who are

critical to the Company‟s operational success and

should get handsome rewards and at the bottom is a

10% band of under-performers who are asked to

leave. This exercise must be followed every year.

This means performance is a continuously moving

benchmark and not a static measurement.

103

iii) Retaining Talent :

Apart from an attractive fixed salary component which

encourages good talent, variable pay continues to be the

single biggest motivating tool employed by Indian

Companies. Various innovative ways for earning

handsome rewards is also a part of motivation helping in

retention of High Performers.

At LG, they believe that the most important attribute for

engagement is empowerment with accountability and the

second most is transparency. For instance, any employee

can meet the Managing Director anytime. If there are any

grievances, action is taken within 12 hours. As a result,

LG claims that 95% of people who have left LG want to

return.

c) How it is useful in current research :

Though the Author has elaborated on three major aspects

pertaining to igniting performance and attaining peak

performance, Researcher is concentrating only on the aspect

of Flexible Reviews followed in various renowned

multinational as well as national corporates. Apart from

actual systems, processes implemented at the time of

Appraisal Systems as stated above, the following major

themes and concepts behind the Reviews, are being

considered vital and meaningful while doing research.

Appraisals become meaningful only if they create

action planning for subsequent employee

development, or if they are able to identify potential for

future growth.

104

Most of the times, performance is taken as the

yardstick of appraisal. However, there is a need to

move in direction of developing assessors who can do

potential assessment.

Weightage is given to performance in ascending order

of Managerial cadres and hence as you go up higher in

the hierarchy, you have to perform that much more.

105

09. Article: “ Organisational Climate vis-à-vis Performance

Appraisal Climate of Agricultural Extension

Organisations”

a) About the Article:

This article is written by Dr. Souvik Ghosh, Scientist, WTCER

(ICAR), Bhubaneswar, Orissa. The same has been published

in the Issue of IJTD-Indian Journal of Training and

Development, for the Quarter: July – September 2005 at

Page Nos. 93 to 106 (Vol. XXXV No.3). This journal gets

published at Institutional Area, New Mehrauli Road, New

Delhi – 110 016.

b) Author’s contribution in the Subject :

The strength of any organization is its people, as ultimately

the varieties of tasks in any organization have to be

accomplished by the people. Unlike physical resources,

human resources have the capability of developing to an

unlimited potential. Author emphatically says that in the

entire process of individual development in an organization,

the performance appraisal plays a vital role. The

performance appraisal is not to pin point the faults of

employees but an important and effective instrument for

helping people to grow and develop in organizational setting.

The effectiveness of the extension workers in promoting and

quickening the dissemination of new agriculture practices

depends on the interaction factors between Oganizational

Climate and Performance Appraisal Climate. Keeping these

facts in mind, the present study aimed to assess the

Performance Appraisal Climate and Oganizational Climate

106

along with exploring the relationship between them. Author

carried out the study in State Department of Agriculture,

Haryana and two Non-Government Organisations (NGO) in

the State of Haryana. Total of eighty extension personnel

from the State departments and thirty personnel from the

NGOs were selected for data collection through Personal

Interview method.

Author, during the study, considered the following two

variables and could measure them on various dimensions of

the Performance Appraisal System.

(i) Performance Appraisal Climate (PAC).

(ii) Organisational Climate.

The dimensions influencing the satisfaction of employees

and used for measuring PAC were :

Participation of Employee.

Feedback to Employees.

Employee Acceptance.

Awareness of PAS objectives.

Clarity of Performance Objectives.

Criteria relevance.

Link between Performance Appraisal & Salary.

Administrative uses.

Development uses.

Reward System and Support System.

Performance Standard.

Superior-subordinate relationship.

107

Chattopadhyay‟s (1982) Organisational Climate

Questionnaire was used to assess the overall

Organizational Climate on the basis of following

dimensions.

Trust.

Personal Development.

Innovation.

Communication.

Supervision.

Decision Making.

Performance.

Managing Problems.

Team Work.

Structure.

Identity.

c) How it is useful in current research :

Though the study was carried out in Agricultural Extension

Organisations, the basic principles, methods for measuring

PAC & Organisational Climate with the help of various

dimensions and the attempt to delineate the PAC

dimensions, which are having significant relationship with

overall Organisational Climate; are required to be taken into

account while formulating Questionnaire for current

research and study thereof.

After going through the results of study and this article,

following important features are very well noted :

108

The present study, itself, has developed a scale to

measure Performance Appraisal Climate (PAC).

Overall Organisational Climate has a direct bearing on

the present utility of Performance Appraisal.

Employee growth and satisfaction with the job,

individual productivity improvement and overall climate

in an Organisation are expected to be influenced by

Performance Appraisal System (PAS) in operation.

Special efforts are required to be made to improve the

PAC leading to a satisfactory level of overall

Organizational Climate. In this context, modification of

existing PAS and/or implementation of development

oriented Performance Appraisal System is very much

required. This overall activity is required to aim for

gaining confidence of personnel by making their

participation in the appraisal system, providing

feedback to them to improve subsequent performance,

promoting personal and professional growth and

competence, giving reward and support to the

employees.

109

10. Article: “ Performance Appraisal”

a) About the Article:

„HRM Review‟ is a monthly publication of ICFAI University.

This article was published in the Issue of „HRM Review‟ for

the month of November 2005. HRM Review is published at

ICFAI University Press, Hyderabad. Article is written by Mr.

K. Adivarahan, Vice President of M/s PBSC Spectacular

Solution Ltd., Chennai. Author is also a qualified

Psychotherapist, Counselor and Consultant in HR.

b) Author’s contribution in the Subject :

In today‟s business world, the entire corporate is considering

Human Resource (HR) function as the most important one.

HR is being responsible for the Organisation‟s effectiveness

and achievements. Hence, the responsibility of HR is very

high. Author says, amongst all activities of HR, performance

appraisal is most important & vital activity with respect to the

growth of workforce and its retention.

Author has defined Performance Appraisal and elaborated

about its need and its methods.

Author mentions that in the current situation, many

organizations have introduced Balance Score Card (BSC)

where the employee fixes the target and appraises himself,

which will then be either agreed to or not by the employee‟s

Supervisors. The method has to be transparent. If an

employee gives himself high scores for his performance, it

has to be approved by his/her immediate Supervisor. The

only advantage, author expresses, is that the employee has

110

to perform all the time instead of at particular times. This

method is being practised in leading organizations like TVS,

Hindustan Latex, Taj Group of Hotels, Mahindra & Mahindra.

In this method, Balanced Score Card is a facilitator for better

performance and not a „monitoring tool‟. The words such as

„monitoring‟, „checking‟, „evaluating‟, are required to be

avoided in the presentation and instead the words like

„facilitating‟, „supporting‟, „helping‟, etc. are to be used.

Author explains that after completing this exercise,

organizational objectives are to be framed. The

Departmental Objectives will flow from the organizational

objectives and from it will flow the Departmental Head‟s

objectives, and from that will flow the individual‟s Balance

Score Card.

Though this method is used for granting annual increments

and promotions, there is a lacuna that employees do not

know about their performance, which is being evaluated by

many others inside and outside the organization.

Author has explicitly made the mention of biggest and

important role of HR Unit in any organization, in retaining

talented people and at the same time ensuing that they are

also performing well in their activities. He has suggested one

of the methods for achieving this important role, which is as

under :

„ I am your customer and you are my customer‟ – should be

focused and well explained to all. The above statement

applies not only in workplace but anywhere, everywhere and

at any point of time in the whole life span of every human

111

being. All conflicts can be resolved in an easy way by

adopting the above.

Taking this as an important message, first all the employees

should be educated about their job responsibility and

accountability. The same should be aligned with the business

plan and strategy of the organization. It has to be ensured

that all the employees‟ job responsibilities and accountabilities

are aligned to achieve the Organisation‟s goal. From this,

each employee can draw Balanced Score Card (BSC) in

concurrence with their Superiors. At this point, the

Management should also decide about 360 appraisals.

Author, in the article, has analysed the importance of 360

appraisal in respect of employee who is connected with

official people, friends and family members and the impact of

all of them on his performance at Organisation.

Figure 3.8: Impact of different environment on

Performance of Employee

Official

Environment

Employee

Friends

Environment

Family

Environment

112

i) In Official Environment, the following people are

connected with the employee.

- Immediate Supervisor.

- Co-worker- in the same Dept.

- Subordinates reporting to him.

- Co-workers in other Depts.

- Cross function reporting people.

- Direct suppliers at various levels.

- Direct customer at various levels.

- Any other related external and direct resources.

ii) Human Resources in Friends’ Circle :

- College / School mates still in touch with the

employee.

- Friends available in the living place.

- Friends in Clubs / Association / Professional

Bodies.

- Friends through some other ways.

iii) Following is the list of Human Resources coming from

Family Environment :

- Immediate Family Members – Spouse, Children,

Parents, Brothers, Sisters.

- Close Family relations with whom contact is being

maintained.

- Other distant Family Members with whom contact

is being maintained.

- In-laws, if applicable.

- Friends of spouse and kids.

- Any other Family-related people.

113

Author has stated the following advantages while assessing the

Characteristics / attributes of employee, through the above

groups. Those are as under :

i) Through questionnaire, employee‟s characteristics and

performance can be assessed by the persons from

Official Environment.

ii) The Friends Environment will reflect the true

characteristics of a person. Friendship will also

influence the employee to a certain level and this will

have some impact on the performance of a person.

iii) Family circumstances play a vital role in any

employee‟s performance. In current world, due to work

pressure, many employees tend to give more care to

work and less care to the family. This often results in

an uncomfortable situation, which can be easily

avoided. The feedback from the family will help in

improving the productivity of employee.

Lastly, Author has advised that the data collected from the

above should be collated in a correct way and it is more

important to inform the concerned about the feedback. It is of

utmost importance to keep the employee informed that

regular feedback is obtained with all concerned people for

improvement purposes. This feedback helps in drawing /

modifying the growth diagram of an employee. Indirectly, the

same would also help in indicating the training road map that

is required. Communicating the feedback in a proper way to

the concerned person will also improve the productivity of the

person and also of the organization.

114

c) How it is useful in current research :

Author has very well elaborated on newly introduced

Appraisal Systems / Methods, those are transparent and

effective like the Balanced Score Card and 360 analysis.

The definition of Performance Appraisal and its need and

methods are well narrated in the Article. Author, vide his

Article has analysed the importance of 360 analysis and

also explained in brief about the possibility of influence and

impact on performance of an employee due to Friends‟ and

Family Members‟ environment. It has been specifically

mentioned that Appraisals can motivate and encourage any

employee, but a bad appraisal can also do the reverse.

All these aspects are very important and noteworthy, during

research.

115

11. Article: “ Appraising the Performance Appraisal –The Indian

Scenario”

a) About the Article:

Mr. Amit Madan, Management Consultant with Praxis Pact

Pvt.Ltd., New Delhi; has written this article. The same has

been published in the issue of IJTD – Indian Journal of

Training and Development, for the Quarter : July –

September 2006 at Page Nos. 43 to 54 (vol. XXXVII

No.3).This journal gets published at Institutional Area, New

Delhi – 110 016.

b) Author’s contribution in the Subject :

Performance Management is the backbone of the HRM

practice in any organization. Author says that there is

widespread realization that Performance Management

Practices have the capability to determine the motivational

level of employees and could be a powerful vehicle in

conversion of employee‟s potential into performance. The

effectiveness of performance appraisal is thus strongly

related to the effectiveness of organization.

Author emphatically says that in India, companies boast of

having an extensive Performance Management System, but

most of them are not more than form filling exercises.

Appraisals are more about increments and separations

rather than contributing to employee development. He

further adds that the middle managers already know the kind

of increments that the Top Management would allow and

tailor their appraisals to justify the predetermined

increments. Author pin-points here that in the fast changing

116

business environment, there is an urgent need for a shift

from judgemental oriented appraisals to developmental

oriented appraisals.

Performance Appraisal System should not be looked as an

administrative activity, as being looked by Indian

Organisation. For appraisals to be justified, they must

contribute to the organizational bottomline. To contribute to

the bottomline, Indian Companies must check attrition rates

and add to the improvement in employee performance and

work culture. Author has listed down the problems as stated

below, in the Indian Appraisal Systems, which have most

detrimental effects.

i) Low frequency of appraisals: In India, most organizations

has adopted annual appraisal system which is too long to be

effective in providing continuous feedback to employees.

Research as shown that motivated and high performing

employees desire more frequent appraisals.

ii) Lack of clear expectation from the employees : Role

ambiguity is a serious problem faced by employees in Indian

Organisations. This ambiguity can be eliminated by laying

down specific Key Result Areas (KRAs) for individual

employees. These measurable parameters help in

channelizing the efforts of employees towards a particular

direction.

iii) Limited focus on results or outcomes : Another major

problem in the appraisal system in Indian Organisations is

limited focus on results. Excessive focus on traits (which is

117

subject to errors) leads to feelings of injustice and

dissatisfaction among employees.

Author gives here the reference of Guido M.J. deKoning, a

strategic consultant with the Gallup Organisation. According

to the later, „the best performance-driven companies are

outcome-focused. They define and rigorously measure

success at every level in the Organisation. Those measures

ultimately help focus every person, team and business unit

on driving performance and results.‟ The ideal appraisal

systems are those with balanced emphasis on both soft

(traits / behaviours) and hard factors ( results or outcomes).

iv) No proper feedback : In a majority of Organisations,

performance appraisal is kept confidential and no or limited

feedback is provided to the employees. Most of the

organizations do not have the practice of holding post

appraisal interviews or communicating appraisals to the

employees. Giving honest and direct feedback is still a

problem. Most Managers hesitate to give negative feedback

to their Juniors as they lack the coaching skills necessary for

the purpose. In a fast operating business environment of

today, frequent and proper feedback is not only important for

the improvement of employees‟ performance but also for the

survival of the Organisation. Proper feedback also requires

transparency of appraisal system. In India, however,

performance appraisal in Government and most Private

Organisations is kept „Confidential‟.

v) Forced Distribution of employees according to

predetermined criteria : Some Indian companies follow

Forced Distribution method popularly called „Bell Curve

118

Appraisal‟. The concept encompasses any system in

which individuals are rated against one another. The most

common is where 20% are rated as „Excellent‟, 70% as

the unspectacular but necessary back bone of the

company and the rest 10% as bottom-feeders, who are

too poor in the performance to ever be trained, so the

solution is to cut 10% of this superfluous flab, every year.

This system is severely criticized for being unethical,

subjective and creating a dysfunctional work environment.

Forcibly retiring a certain section of staff is the most

unethical thing, being done in Indian scenario.

Author suggests that proper counseling, performance

improvement and redeployment measures should be

considered for poor performers, rather than focusing

mainly on separation, in appraisal system.

vi) No proper usage of appraisal information: Another

major problem which substantially limits the effectiveness

of performance appraisal in Indian Organisations is

improper usage of appraisal information. Performance

Appraisal is mainly used for promotion and compensation

decisions. Thus, the key applications of appraisal

information i.e. career and succession planning,

identification of training needs, role clarity, employee

relations, building high morale and motivation and HR

research are generally ignored.

In view of above limitations resulted through a study conducted

by the Author, Author has given following recommendations for

improvement of present Performance Appraisal System.

119

Frequency of Appraisal : Formal Appraisals should be

conducted half-yearly and an informal mid-review of work plan

should also be done quarterly so as to provide feedback to

employee regarding his performance.

Feedback on Performance : Appraisal System should be

kept transparent and employees should be informed about

the standards by which their performance can be measured.

A detailed post appraisal interview should be conducted for

the purpose, the same comes out sometimes, as a good tool

to identify the potential in employees for higher positions and

are thus useful for making career and succession planning

decision.

Identification of Aptitudes & Interests : Performance

Appraisal Form should have a column to be filled by the

immediate superior about the areas where employee can

better be utilized. Aptitude and interest tests should be

conducted so that inherent work preferences of employees

can be known.

Greater focus on Results : Greater focus is required to be

given on actual outcome in respect of all employees‟

appraisal. The ratio of weightages of actual outcome to

traits/competencies should be 75% to 25%.

Reduction of bias in appraisal : There should be a provision

of appeal by the appraisee, if he/she finds bias in appraisal.

Suitable action should be taken, if the claim is found true.

Discontinuance of Forced Distribution Method: The

120

present Forced Distribution Method should be discontinued,

as it is very unethical, subjective, unsuitable for small teams

and creating a dysfunctional work environment.

a) How it is useful in current research :

The study discusses the key limitations of present appraisal system

in Indian Industry.

The key limitations being low frequency of appraisals, lack of clear

performance expectations from employees, limited force on result

and outcomes, no proper feedback, forced distribution of

employees according to predetermined criteria and inadequate

focus in identifying aptitude and interests of employees, are

required to be taken into consideration while designing

Performance Appraisal System in order to avoid ineffectiveness of

system.

A new Appraisal System named as MORE(Managing Objectively

and Reviewing Effectively ), which is free from limitations, is very

well noted, as it is designed keeping in mind the elimination of all

shortcomings which can creep into the appraisal system.

The more important aspect about MORE, one has to always admit

and appreciate that its effectiveness depends on its application and

laying down KRAs, Tasks, KRIs (Key Result Indicators) and

Technical Competencies for each position and each individual.

Article has given an insight about the key limitations and solutions

to overcome them, which is very useful to check at the time of

studying Organisation‟s Performance Appraisal System and

accordingly recommend the solution thereof.

121

12. Article: “ Utilising 360–degree Feedback Innovatively ”

a) About the Article :

This article was published in issue of „HRM Review‟ for the

month of April 2004. HRM review is published at ICFAI

University Press, Hyderabad. The article is written by Radha

R. Sharma, who is a Professor of Organisational Behaviour at

Management Development Institute, Gurgaon. The article then

appeared in the book named „effective Human Resource

Management‟ (at page nos. 53 to 57, edited by Shri. P.V.L.

Raju, published by ICFAI Books, at the ICFAI University Press.

b) Author’s contribution in the Subject :

In an Organisation, 360-degree assessment is based on the

assessment of an individual‟s management styles,

competencies and behaviour by colleagues horizontally and

vertically involving boss, peers and direct reports. This is

supplemented with self-rating and can, therefore, be a powerful

mechanism through which information regarding personal or

employee development can be obtained. One of the innovative

features about 360-degree feedback is the upward feedback,

which is considered as an important process contributing to

individual and organizational development.

Author says, the most innovative one of all is to include family,

spouse and friends as a tool for feedback, provided the focal

employee agrees or volunteers to do so. Author further states

that the advantage of this process is that one obtains

information from multiple sources and from people who routinely

work with and are affected by the employee‟s behaviour. One

may classify the sources into three broad categories – 1) Those

122

who come in direct contact of the recipient (the focal person

about whom the feedback is being sought) like supervisor,

peers, subordinates, and internal or external customers. 2) The

individual himself / herself. 3) Those who involve in his / her

work-related performance. Some organizations include client /

customers too in the feedback loop.

Author categorically clarifies that, there is no denying the fact

that this 36-degree feedback approach improves the quality of

feedback and is comparatively more reliable than feedback

appraisal form one source which may suffer from subjectivity.

Besides, certain competencies like leadership, setting direction;

sensitivity to subordinate-needs can be better assessed by this

method than any other method. Thus, 360-degree feedback

can be a very useful tool for training need analysis for

leadership development.

Author, however, specifically states, experience of companies

suggest that upward feedback should be used only for

developmental purposes and should not be linked with pay

increase or promotion.

The multisource feedback is being used for improvement of

perception of the individual about oneself by understanding how

others perceive him, increasing interpersonal communication

among team members, identification of development needs like

potential and leadership competencies, planning for

development centres, management development, career

planning and leadership development. It also facilitates learning

process for the employees and helps them manage their

performance better.

123

Thereafter, the 360-degree implementation in companies like

Wipro, Motorola, Johnson and Johnson, Philips, GE and NIIT

has been discussed.

The article finally concludes that 360-degree feedback would

work only when it is used as a development tool with focus on

competency development.

c) How it is useful in current research :

It is made very clear that 360-degree feedback would work only

when it is used as a development tool with focus on competency

development and there is support from Top Management and

trust among employees about its objectives. In addition, the

Organisation needs preparation starting with identification of the

problem to be addressed, contextual analysis, allocation of

resources, a comprehensive plan of implementation and follow-

up.

It is also well understood that if 360-degree feedback is a

revolution in PA system, it has still gone a step ahead to include

family, spouse and friends to make it truly comprehensive.

Optimizing the utility of this method would help in leadership

development.

Though, no inclusion of family, spouse and friends for obtaining

feedback under 360-degree feedback mechanism is observed in

Indian scenario, it is noteworthy to consider the feedback of

them about the individual as the possibility of influence and

impact on performance of an individual due to friends‟ and

family members‟ environment, is always bound to be there.

124

Though, there is a possibility of an impact of Family, Spouse

and other Influence Group on the Performance of an Employee,

the same has, unfortunately, not been considered by the

Organisations / Companies studied by the Researcher.

However, Researcher certainly feels that it may be worthwhile to

have an independent research on this aspect with respect to

Performance Review under Performance Management System.

125

3.1 Conclusion:

In view of the study of existing literature, following vital elements have

been brought out.

01. Manager (Reviewer / Appraisor) himself/herself should have strong,

positive perceptions of Performance Review Systems followed in the

Organisations.

02. Performance Reviews are required to be viewed as an investment

rather than a cost.

03. Employees‟ Jobs and Responsibilities are required to be carefully

planned and „rationalised‟ in terms of Company‟s target and Top

Management‟s Plans. Departmental Goals should map out what and

how the Department is to contribute towards achieving the

Company‟s Goals and cascading down to Individual Goals.

04. The information collected during the Performance Management

Process is to make more effective decisions about training,

development, budgeting and spending. On identification of barriers

to performance or opportunities to improve performance, the same

could be remedied through Training & Development.

05. Appraisals become meaningful only if they create action planning for

subsequent employee development, or if they are able to identify

potential for future growth.

06. Most of the times, performance is taken as the yardstick of

appraisal. However, there is a need to move in direction of

developing assessors who can do potential assessment.

126

07. Employee growth and satisfaction with the job, individual productivity

improvement and overall climate in an Organisation are expected to

be influenced by Performance Appraisal System in operation.

08. The Performance Appraisal Activity is required to aim for gaining

confidence of personnel by making their participation in the

appraisal system, providing feedback to them to improve

subsequent performance, providing personal and professional

growth and competence, giving reward and support to the

employees.

09. Many times, Appraisal Systems also fail as goals and Performance

Metrics are often not clearly defined. Goals are also not aligned to

all the departments and functions of an Organisation, as a result of

which there is no ownership of certain crucial goals in certain

departments.

10. Meaningful process of PMS is having 5 steps of procedure viz.

Quarterly Review, Annual Goal Setting, Quarterly Review of

Achievement of goals, Annual Performance Review and for taking

decisions about Salary and Bonus.

The review of literature gave Researcher an insight into the study and

also helped him to develop a vision to view into the area of his interest /

research.

The current study is inspired by above literature. Researcher would

identify the gap viz. most of the literatures concentrate on mechanics of

Performance Appraisal while Management aspects are not fully

covered. It is also established that objectively speaking nobody is

against Performance Appraisal, but in an actual practice, unfortunately

in many cases, mechanics dominate the Basics. The credibility of

Management is at stake. The effort of Researcher is to partly bridge the

127

gap in the existing literature by studying the cases of 13 selected

Organisations from different sectors such as Engineering, Automobiles,

Pharmaceuticals, Chemicals, Electronics etc. with respect to

Performance Appraisal System, practised therein, pertaining to

important factors viz. Performance Planning, Annual Goal Setting,

Review of Achievement of Goals, Regular Coaching & Counselling and

Review between Assessors and Assessees, Identifying the

Developmental Training Needs etc.

The selected Organisations are as under :

1) Engineering - M/s Cummins India Ltd.

2) Automobiles - M/s Daimler Chrysler (I) Pvt.Ltd.

3) Automobile Components- M/s Mahle Filter Systems (I) Pvt.Ltd.

4) Pharmaceuticals - M/s Emcure Pharmaceuticals Ltd.

5) Chemicals - M/s Aquapharm Chemicals Pvt.Ltd.

6) Electronics - M/s Philips India Ltd.

7) Information Technology - M/s Mahindra-British Telecom Ltd. (MBT)

8) Hotel - M/s Le Meridien

9) Hospital - M/s Jehangir Hospital

10) Food & Beverages - M/s Coca Cola India Pvt.Ltd.

11) Banking - M/s Bank of Baroda

12) Media - M/s Indian Express Newspapers (Mumbai) Ltd.

13) R&D Institute - M/s The Automotive Research Association of India

The Researcher is highly impressed by the under currents in variety of

Organisations studied viz.

128

i) Subjectivity:

Many studies have testified to subjectivity as a significant

problem. This has been demonstrated at a scientific level:

different appraisers do come to different conclusions based on

the same data, because they have different values, different likes

and dislikes. Appraisees often consider their Manager‟s

assessment of them to be unfair, even biased, and this may

render the whole process ineffective because of the perceived

injustice.

Subjectivity can be reduced ( but clearly not eliminated) by

defining an appraisal process which concentrates on factual

achievement rather than on style or character, by basing

assessment on agreed objectives, by involving other „referees‟ in

the preparation stage, by making the appraisal interview itself an

open, two-way process and limiting the Appraisee to contribute a

Self-Appraisal Subjective Judgement, therefore, should not be

regarded as obstacle to Performance Appraisal System.

ii) Central Tendency, Leniency / Severity :

- Particularly when numerical ratings are used, it has been

observed that Appraisers avoid giving extreme marks or

opinions, leading to „water down‟ their assessment; this is

known as „Central Tendency.‟ Its cause seems to lie partly in

Appraisers lacking confidence and failing to exercise sufficient

discrimination and partly in the Communication process:

Appraisors do not like to give extreme signals. Many

Appraisors avoid giving a top marks for fear that it will induce

complacency, while some admit that a top-rated subordinate

can constitute a threat to the Appraisor him / herself.

129

- Appraisors are lenient to different degrees, and some (though

exceptions) are better described as severe. Different „Norms‟

used by different Managers obviously pose an acute problem

when ratings have to be compared ( for salary or promotion

purposes, for instance).

iii) Halo, Recency and Contrast Effects :

- A persistent problem in all assessment has been called the

„halo effect‟. This is the tendency to rate someone with, say,

on particular quality as being generally good – hence the

halo. Obviously, the reverse can happen too, so that an

unfortunate subordinate with one marked (or even supposed)

weakness can get written off as being generally useless or

lacking in potential.

- Secondly, Appraisors are prone to put too much emphasis on

the most recent behaviour or impression – instead of judging

the whole period to be covered by the appraisal.

- There are also various types of contrast effect in assessment.

The one that occurs most markedly in performance appraisal

is often allied to recency. If a normally well-rated individual

performs slightly less well than would be expected of them,

this can come out as an exaggeratedly low performance

rating, an utter fall from grace - Conversely, a fairly average

bit of performance from someone who is usually considered

weak can get out of proportion.

All above points are always at the back of mind of the

Researcher, while analyzing data, stating facts and figures,

explaining feelings and opinions, so that Performance

130

Appraisal Study is comprehensive in nature, though there

could be some obvious limitations in process.

All Researchers have to face this situation. Researcher has

been impressed by description of Professional Management

viz. Systems do not Manage, Managers manage with the help

of System. Obviously, Managers are more important than

Systems. It is, therefore, role of Managers to manage the

System and credibility of Manager largely depends upon the

spirit with which Performance Appraisal Systems have been

designed, implemented and redesigned.

Researcher has also identified some areas of further

research so that research in the field of Performance

Appraisal will continue and over a period of time as the

experience is gained, employees will appreciate its

importance and Management will try to establish credibility at

all levels.