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HUMAN RESOURCE MANAGEMENT
LIBRARY PROJECT ON
PERFORMANCE APPRAISAL MANAGEMENT
SUBMITTED BY
NAME: ANAND SUBBARAMAN
ROLL.NO: 02
CLASS: MMS-I
1
TABLE OF CONTENTS
CHAPTER
NO.
TOPIC PAGE NOS.
1 INTRODUCTION 4-5
2 JOB DESCRIPTION & ESSENTIAL
FUNCTIONS
6
3 STANDARDS OF PERFORMANCE 7-8
4 OBSERVATION & FEEDBACK 9-10
5 PERFORMANCE APPRAISAL 11-14
6 PERFORMANCE DEVELOPMENT &
CONCLUDING REMARKS
15
7 PERFORMANCE APPRAISAL MANAGEMNT
SYSTEM AT TCS
16-20
-- BIBLIOGRAPHY 20
OBJECTIVE OF THE PROJECT:
2
The main objective of this project is to study the basic difference between performance
appraisal & performance management. To study various steps that are
involved in the performance management process and also to identify how
crucial is performance management system for an organization and its
employees to achieve their objectives.
PROJECT PLAN :
The entire project has been divided into five main topics, which are the steps involved in
performance appraisal management process. Towards the end of this report, a live case
study of how performance appraisal management system is implemented in TCS is
explained.
DATA SOURCES :
Main source of data is the secondary data, which has been obtained from books on
Human Resource Management, HRM Review and other sources. These references are
given at the end of this project report.
3
CHAPTER-I : INTRODUCTION
PERFORMANCE MANAGEMENT :
An ongoing communication process that involves both the performance manager
and the employee in:
1) Identifying and describing essential job functions and relating them to the mission
and goals of the organization.
2) Developing realistic and appropriate performance standards.
3) Giving and receiving feedback about performance.
4) Writing and communicating constructive performance appraisals.
5) Planning education & development opportunities to sustain, improve and build on
employee work performance.
OVERVIEW OF PERFORMANCE MANAGEMENT:
4
Job Description & Essential Functions.
Standards Of Performance.
Observation & Feedback.
Performance Appraisal
Performance Development.
The evolution of the concept of performance management as a new Human Resource
Management model reflects a change of emphasis in organizations away from command-
and-control toward a facilitation model of leadership.
This change has been accompanied by recognition of the importance to the employee and
the institution of relating work performance to the strategic or long-term and overarching
mission of the organization as a whole.
The performance management process provides an opportunity for the employee and
performance manager to discuss development goals and jointly create a plan for
achieving goals. Development plans should contribute towards organizational goals and
professional growth of the employee.
In today’s globalized economy, wherein many MNC’s are setting up offices in India and
offering higher pay packages as compared to Indian companies, performance appraisal &
management has become very important and at the same time challenging for the
performance managers. Performance managers and their employees are increasingly
being asked to become generalists who step outside of traditional narrowly-defined job
descriptions in support of team objectives and goals. These changes are resulting in the
development of new approaches to human resource management. For performance
managers and employees alike, responding to these changes requires the ability to learn,
adapt to change, solve problems creatively, and communicate effectively in diverse
groups. In addition, employees must take personal and proactive responsibility for their
careers to ensure future employability and advancement.
The realities of the contemporary workplace will continue to challenge existing
paradigms and should be considered in managing the performance of employees in a
dynamic working environment.
5
CHAPTER-II : JOB DESCRIPTION & ESSENTIAL
FUNCTIONS.
JOB DESCRIPTION :
Before a job vacancy is advertised, a job description is completed. After the employee is
hired, this job description becomes the job assignment and forms the basis of the job
function description on the Performance Evaluation Form.
Writing a job description is a process of systematically collecting, analyzing, and
documenting the important facts about a job. This process is called job analysis. The job
description provides a basis for job-related selection procedures and performance
standards. The job description specifies:
1) The specific job functions & tasks.
2) The skills, knowledge and abilities required to perform the job successfully.
3) The physical & mental requirements of the position.
4) Special conditions of employment.
5) The level of supervision received & exercised.
The performance manager should share the job description with the employee during his
or her first few days on the job.
STRATEGIC PLAN :
A strategic plan is composed of a mission statement, identified goals related to the
organization's mission, as well as strategic initiatives necessary to accomplish each goal.
The mission statement describes the fundamental reason for which an organization or
department exists. The goals identify the results, which will further that mission, and
strategic initiatives set out the specific steps, which must be taken to achieve those
results. Strategic planning is a dynamic process, which is usually revisited at intervals of
between one to two years.
Individual employees should each make a contribution to realize the goals and should be
responsible for accomplishment of specific strategies to support these goals.
6
A performance manager should consider the annual goals and strategic initiatives for
which the employee is responsible while describing the position, setting standards of
work performance, giving feedback about performance, doing the annual performance
appraisal, and planning for employee education, training and development.
CHAPTER-III : STANDARDS OF PERFORMANCE.
DEVELOPING WRITTEN PERFORMANCE STANDARDS:
When performance standards are in place, both the performance manager and the
employee will know what are the expectations for the performance of essential
functions and related tasks. This common understanding provides the basis for
ongoing feedback and performance counseling between appraisals as well as for
the formal performance appraisal process.
DEVELOPING STANDARDS COLLABORATIVELY:
There are a number of approaches to developing written performance standards.
One is the directive approach in which the performance manager writes the
standards, in consultation with management and the employee relation’s
representative for his or her department. Then the standards are shared with the
employees affected, for their information and to address any questions they may
have.
Another is a collaborative approach in which performance manager’s work with
employees to develop the performance standards for the particular employees
position. While it is a legitimate option to develop the standards without
employee input, the benefits of a collaborative approach are important. Both the
performance manager and the employee bring valuable information to the process
and the end result is more likely to be supported by everyone involved.
However, the performance manager will make the final decision about the
appropriateness of the standards in consultation with management and employee
relations’ consultant for a particular position. Mutual agreement with the
employee about standards is preferable, but not always possible. Mutual
understanding and recognition of the standards is necessary. In the collaborative
process of developing standards for a task or function, all employees whose work
will be evaluated according to those standards are included. If the task or function
is unique to one position, then the employee in that position is included in the
development process, and if more than one employee performs the task or
7
function, then all the employees whose job description includes that function are
involved in the development process. Before setting performance standards for a
particular post, the employees in that particular post should be told as to how they
are going to be evaluated on the basis of the performance standards set for them.
Once the performance standards have been developed, the next step is to write
them down on the basis of measurable or verifiable features of the performance.
1) Performance expectations are described in terms of timeliness, cost,
quality, quantity, customer satisfaction, independent initiative
demonstrated and any other relevant verifiable measure.
2) The acceptable margin of error is specified.
3) Conditions under which the performance is expected to be accomplished
or assessed is specified.
Once the standards are written down, they are checked on the basis of following
points:
1) Whether the standards are realistic.
2) Whether the standards are specific.
3) Whether the standards are based on measurable data.
4) Whether the standards are consistent with organizational goals.
5) Whether the standards are clear and understandable.
8
CHAPTER-IV: OBSERVATION & FEEDBACK.
OBSERVING EMPLOYEE PERFORMANCE:
From the performance management point of view, observation involves noticing specific
facts, events, or behaviors related to work performance and the results of work
performance. Observations are the raw data upon which effective performance feedback
may be based. The purpose of observing employee behavior and the results of work
performance is to identify and describe it in order to help the employee be successful and
continue to develop his or her skills, knowledge, and experience. By observing the
employee performance, the performance manager will be able to gather additional
information to make both praise and constructive feedback both highly effective.
Observations should be the basis for feedback, and may also suggest actions, which
might be taken to support, develop or improve performance. Feedback based on observed
or verifiable data is more likely to influence employee behavior than feedback, which
cannot be supported by firsthand information. In situations when the performance
manager is not present to observe employees at work, then the performance manager
should make sure that there are processes in place through which he can learn about how
the employee is performing his duties/responsibilities. The processes, which will be in
place, should be fair, open & understood by everyone. Even if the processes are in place
to evaluate employee performance, it should not limit the performance manager from
practicing the following:
1) Evaluation of output & products of employees work.
2) Having routine one-to-one meetings with employees and this should include
discussions of performance.
3) Periodical review of standards of performance of employees.
4) Getting feedback from customers.
5) Performing routine spot checks of the employee at work.
9
6) Getting feedback of employees’ performance from his peers.
BEHAVIORAL FEEDBACK:
Feedback may be defined as "information about past behavior, delivered in the present,
which may influence future behavior." Feedback is influential. During the performance
appraisal period, the performance manager must give feedback about employee’s
performance regularly. When employees receive feedback that is timely, frequent and
specific they are more likely to understand what is expected of them, to repeat successful
performance and to improve their work when necessary. Feedback, which describes
observed or verifiable behavior and facts, is different from feedback, which evaluates the
person based on assumptions, interpretations, generalizations, and judgments about what
the behavior or facts mean.
Behavioral feedback consists of statements about observed or verified behavior related to
performance standards. If the employee does not understand what is expected out of him,
then the performance manager should make it clear as to what is expected out of him.
Following points should be remembered while giving behavioral feedback to employees:
1) Behavioral feedback should be based on specific, observable or verifiable, data
and information, and should be delivered as close to the event or behavior as
possible.
2) After describing the observations to the employee, the performance manager
should give a chance to the employee to give his inputs.
3) The performance manager should never give threats or promises of promotion to
his employees.
The behavioral approach to feedback is valuable when describing performance, which
needs to be improved, because the employee learns which specific behaviors to change
rather than receiving general comments, which don't give much information.
Merely by giving a positive/negative feedback to the employee, wont be sufficient for the
employee to perform better. The employee must know exactly in which areas he should
improve. This can be done through a process called performance appraisal, which is
discussed in the next chapter.
10
CHAPTER-V: PERFORMANCE APPRAISAL.
PERFORMANCE APPRAISAL:
Definition: Performance appraisal is a process of assessing, summarizing and
developing the work performance of an employee.
Performance appraisal can be broadly used for two purposes as explained below:
1) Administrative Purposes: From the administration point of view, appraisal
programs provide input that can be used for the entire range of HRM activities.
Performance appraisal is directly related to a number of major HR functions like
promotions, transfer and lay-off decisions. Performance appraisal data may also
be used in HR planning, in determining the relative worth of jobs under a job
evaluation program, and as criteria for validating selection tests. Finally, it is
important to recognize that the success of the entire HR program depends on
knowing how the performance of employees compares with the goals established
for them.
2) Developmental Purposes: From the individual development point of view,
appraisal provides feedback essential for discussing strengths, weaknesses as well
as improving performance. Regardless of the employee’s level of performance,
the appraisal process provides an opportunity to identify issues for discussion,
eliminate any potential problems and set new goals for achieving high
performance.
11
We have already looked at the purposes for which performance appraisal needs to be
done. Now let us look at who are all involved in appraising performance of an employee
in an organization.
1) Manager/Supervisor Appraisal : In this type, performance appraisal is done by
the employee’s manager and is reviewed by a manager one level higher. This has
been the traditional approach to evaluate employee’s performance.
2) Self-Appraisal : In this type, performance appraisal is done by the employee
being evaluated, generally on an appraisal form completed by the employee prior
to the performance interview. This type of appraisal is beneficial when managers
seek to increase an employee’s involvement in the review process. This approach
also works well when the manager and the employee jointly establish future
performance goals or employee development plans.
3) Subordinate Appraisal: In this type, performance appraisal of a superior is done
by an employee, which is more appropriate for developmental than for
administrative purposes. Since subordinate appraisals give employees power
over their bosses, the managers themselves may be hesitant to endorse such a
system, particularly when it might be used as a basis for compensation decisions.
4) Peer Appraisal: In this type, performance appraisal is done by one’s fellow
employees, generally on forms that are compiled into a single profile for use in
the performance interview conducted by the employee’s manager. Employers
using peer appraisals must be sure to safeguard confidentiality in handling the
review forms. Any breach of confidentiality can create interpersonal rivalries or
hurt feelings and bring about hostility among fellow employees.
5) Team Appraisal: This type of performance appraisal is based on TQM concepts
that recognizes team accomplishment rather than individual performance. This
can be called as an extension of peer appraisal.
6) Customer Appraisal: This type of performance appraisal is also based on TQM
concepts and seeks evaluation from both external and internal sources.
7) 360 degree Appraisal: 360 degree feedback is intended to provide employees
with as accurate a view of their performance as possible by getting input from all
angles: supervisors, peers, subordinates and customers. This type of appraisal
was purely developmental and restricted mainly to management and career
development, but now this type of appraisal is also used to assess the
performance of employees in an organization. While implementing 360 degrees
performance appraisal, organizations should take note of the following points:
(i) Assure anonymity.
(ii) Make respondents accountable.
(iii) Prevent gaming of the system.
(iv) Use statistical procedures.
(v) Identify and quantify biases.
12
360-degree feedback can provide a valuable approach to performance appraisal,
but its success depends on how managers use the information and how fairly
employees are treated.
PERFORMANCE APPRAISAL METHODS:
Performance appraisal methods can be broadly classified as measuring traits, behaviors or
results. Trait approaches continue to be the more popular systems despite their inherent
subjectivity. Behavioral approaches provide more action-oriented information to
employees and therefore may be best for development. The results oriented approach is
gaining popularity because it focuses on the measurable contributions that employees
make to the organization. Let us look at each type of performance appraisal method in
detail.
1) Trait Method: Trait approaches to performance appraisal are designed to
measure the extent to which an employee possesses certain characteristics such as
dependability, creativity, initiative and leadership. Trait approaches are popular
because of the ease with which they are developed. Following are some of the
scales, which are used in trait method.
(i) Graphic Rating Scale: This is a trait approach to performance
appraisal whereby each employee is rated according to a scale of
characteristics.
(ii) Mixed-Standard Scale: This is a trait approach to performance
appraisal similar to other scale methods but based on comparison
with better than, equal to, or worse than a standard.
(iii) Forced-Choice Method: This is a trait approach to performance
appraisal that requires the rater to choose from statements designed
to distinguish between successful and unsuccessful performance.
(iv) Essay Method: This is a trait approach to performance appraisal
that requires the rater to compose a statement describing employee
behavior.
2) Behavioral Method: One of the potential drawbacks of trait-oriented
performance appraisal is that traits tend to be vague and subjective. To overcome
this, behavior methods have been developed to specifically describe which actions
should be exhibited on the job. They are frequently more useful for providing
employees with developmental feedback. Following are some of the behavioral
methods:
(i) Critical Incident Method: It is an unusual event that denotes
superior or inferior performance in some part of the job.
(ii) Behavioral Checklist Method: This method consists of having the
rater check those statements on a list that the rater believes are
characteristic of the employee’s performance or behavior. This is
one of the oldest appraisal technique.
13
(iii) Behaviorally Anchored Rating Scale: This method of performance
appraisal consists of a series of vertical scales, one for each
important dimension of job performance.
(iv) Behavior Observation Scale: This method of performance
appraisal measures the frequency of observed behavior.
3) Results Method: Rather than looking at the traits of employees or the behaviors
they exhibit on the job, many organizations evaluate employee accomplishments.
Advocates of this method argue that looking at the sales figures, production
output and the like involves less subjectivity and therefore may be less open to
bias. Following are some of the ways by which results method is implemented:
(i) Productivity Measures: There are a number of results measures
available to evaluate performance. Sales people are evaluated on
the basis of their sales volume. Production workers are evaluated
on the basis of he number of units they produce and perhaps the
scrap rate or number of defects that are detected. Each of these
measures directly links what employees accomplish and results
that benefit the organization. In this way, result appraisals can
directly align employee and organizational goals.
(ii) Management by Objectives: This is a philosophy of management
that rates performance on the basis of employee achievement of
goals set by mutual agreement of employee and manager.
STEPS FOR PERFORMANCE APPRAISAL:
1) Preparing: Typically performance appraisal for career employees is due one
year from the end of the probationary period or before the merit cycle. The
preparation process involves review and data gathering, holding a preliminary
meeting with the employee, and employee preparation of a self-appraisal.
2) Writing: The writing phase of the performance appraisal process involves
completing the form for the Performance Appraisal Models used by the
organization, and writing the supporting comments.
3) Delivering: Planning the performance appraisal meeting contributes to the
success of the process. Following points should be kept in mind before calling
any employee for a performance appraisal meeting:
(i) Prior to the meeting, the written appraisal of employee’s performance
must be reviewed.
(ii) In the performance appraisal meeting, only the appraiser and the
employee who is being apprised must be present.
(iii) If there is any difference of opinion, it must be clarified during the
meeting.
(iv) The appraiser must show interest in the employee’s progress.
4) Producing: A copy of final signed performance appraisal should be given to
the employee for his or her records. The performance appraisal process is
intended to breakdown barriers and maintain open communication, creating an
atmosphere that allows a candid approach to discussions of performance.
14
During the new review period, the performance manager and employee discuss
the employee’s on an ongoing basis until it is time for the next written
appraisal. This communication is part of the ongoing process of observation and
feedback.
Once the performance of the employee is appraised, the next logical step is to see to it
that the employee improves his performance every time. To ensure that this happens in an
organization, a proper performance development plan should be drawn up. We will look
at performance development in the next chapter.
CHAPTER-VI: PERFORMANCE DEVELOPMENT
CONTINUOUS LEARNING:
Development of employee skills, knowledge and experience is essential in today's rapidly
changing workplace. In order for the organization to remain competitive and to retain its
reputation for excellence, employees should have up-to-the-minute information and the
ability to use new technologies, adapt to organizational change, work in flatter
organizations in which cross-functional skills and knowledge are required, and work
effectively in teams and other collaborative situations. Employees, too, recognize that it
is essential for them to continue to learn so that they will be effective in their current jobs
and able to move into other positions or accept new responsibilities as circumstances
demand.
PREPARING THE PERFORMANCE DEVELOPMENT PLAN:
There are four principal occasions when preparation of a performance development plan
might be considered:
1) After definition or review of performance standards.
2) As a part of the ongoing process of observation and feedback.
3) As the final element of the performance appraisal process.
4) When an employee initiates a request for education or development opportunities.
15
At any of these points in the performance management process, the performance manager
may discuss training, education or development opportunities with his/her employee.
CONSIDERATIONS:
Performance development plans should be considered with the needs of the organization
and the needs of the employee in mind. Before deciding upon the development plan for a
employee, the organization/department should assess its future goals and objectives, so
that the development plan of the employee can be designed accordingly.
CONCLUDING REMARKS:
Many say that intrinsic motivation and not rewards is the important factor for an
individual to enjoy his/her job. But after having discussed about performance appraisal
management, we can say that intrinsic motivation, although important, may not work
over a long run, because an employee will be satisfied only when he is appreciated by his
superior for a job well done and rewarded accordingly. So it is important that for an
organization to grow, it has a proper performance appraisal management system in place.
CHAPTER-VII: PERFORMANCE APPRAISAL
MANAGEMENT SYSTEM AT TCS.
OVERVIEW OF TCS:
Tata Consultancy Services Limited (TCS) commenced operations in 1968, when the IT
services industry didn’t exist as it does today. Now, with a presence in 32 countries
across 5 continents, & a comprehensive range of services across diverse industries, TCS
is one of the world's leading Information Technology companies. Six of the Fortune Top
10 companies are among TCS’s valued customers.
Tata Consultancy Services Limited (TCS) is the world-leading information technology
consulting, services, and business process outsourcing organization that envisioned and
pioneered the adoption of the flexible global business practices that today enable
companies to operate more efficiently and produce more value.
Tata Consultancy Services Limited (TCS) is part of one of Asia's largest conglomerates -
the TATA Group - which, with its interests in Energy, Telecommunications, Financial
Services, Chemicals, Engineering & Materials, provides TCS with a grounded
understanding of specific business challenges facing global companies.
Tata Consultancy Services Limited (TCS) is engaged in the following service practices:
1) Application Development & Maintenance.
2) Architecture & Technology Consulting.
16
3) BPO
4) E-business.
5) Engineering & Industrial services.
6) E-security.
7) IT infrastructure services.
8) Large Projects.
9) Process solutions.
10) RFID Solutions.
Tata Consultancy Services Limited (TCS) caters to industries like banking, financial
services, insurance, telecom, manufacturing, media, retail, transportation etc.
HR PRACTICES @ TCS:
The TCS-HR group operates with technical experts to create a synergy, which is
enviable. HR plays the role of facilitator at TCS as shown in the figure (next page). So
whether it is recruitment or even career development, HR is the catalyst, which initiates
and institutionalizes processes. To manage all the functions for over 14000 employees is
a Herculean task but the smoothness of operations is intriguing. The HR structure, which
allows flexibility and empowerment, is the solution.
17
Performance Discussions
and Performance
Management for all at a
center.
The Center Manager
GL’s/TL’s
Recruitment Training
(Technical/Behavioral)
Career
Development/Monitoring.
Allocation to
Projects.
(Domestic/Overseas)
The HR head of each region at TCS has sufficient degree of authority to carry out
relevant functions and yet the corporate is easily accessible for advice and guidance. Such
a structure promotes sharing of best practices across the regions and the
institutionalization of the best across the regions.
RECRUITMENT:
TCS believes in the strength of human resources, and focuses predominantly on the
recruitment function. A sound recruitment process translates into a sound foundation for
the organization. In the dynamic software industry, with the demand far outgrowing the
supply, it is the quality of people and workforce practices that are the deciding factors for
any organization's success.
With process orientation so intricately woven into the HR practices, system thinking is
the key for the design of all design of all workforce practices at TCS. TCS follows a
simplified "Waterfall Recruitment Process" to recruit world-class talent. While TCS has a
very sound recruitment process starting from accrediting institutes to training on
interview techniques.
The accreditation process includes a list of parameter that must be met. These include
library facilities, standard of entrance tests, number of full time faculty, number of
computers vis-à-vis number of students, among others. The accreditation is done and
short listed by software, which has the requisite checklist. The HR group has been
accustomed to using technology so that objectivity is maintained and so is accuracy of
data. The Waterfall recruitment process is shown below:
18
Recruitment
Detailed Design & Plan
Cultivate Resource
Selection Test/Interview
OfferInductIntegrate InfoTrainDeploy
TRAINING:
TCS has the best training facilities for its employees. The HR group at TCS plays a vital
role in grooming the new recruits and helping them understand the culture at TCS.
At the TCS Training Center in Trivandrum, the HR officers strike an immediate rapport
with the young new entrants and orient them into the professional phase of their life.
Focusing on team building, competitive presentation skill and grooming, the HR
professional takes the new entrant through what are called as Life Skills. There are
dedicated HR resources (Life Guards) provided for every batch at the center to guide and
help new entrants in their transition phase form students to IT professionals. And they are
there with the batch through all its highs and lows through the 72-day long training
programme, providing individual assistance when required helping the new entrants tide
over the new demands of professional life.
RETAINING THE BEST TALENT:
In an era where company loyalty is on the decline, and demand for skilled software
resources is so devastatingly high, TCS's strength lies in retaining and developing its
employees. Its low attrition rate while surprising is also expectable. TCS constantly
reviews its HR policies because often these decide whether an employee will stay or
choose to leave.
19
In TCS, the stress is on identifying the competencies required for a role and then filling
the positions. And it is here that the Manpower Allocation Task Committee (MATC) in
TCS has a predominant role to play. TCS has a career path for Technical persons, for
managers and for Research Scientists and here again the HR group facilities the entire
process through a thorough competency matching. This is done by a function unique to
TCS called the MATC- Manpower Allocation Task Committee. MATC is aided by a
system that assists in identifying not just competencies for a role but also the level of
competency required to fit. The committee is responsible for the allocation of every
individual to projects depending on the set of competencies and the level of capability in
these competencies. These could be a projects in India or overseas. The Career Paths
have been designed by the Consultancy experts and necessary qualities (both behavioral
and technical) required, have been used as inputs.
PERFORMANCE APPRAISAL MANAGEMENT:
TCS’ performance management system emphasizes objectivity and mandates
performance evaluation against predetermined criteria. Senior management at TCS is
actively involved in determining guidelines for performance appraisal process. The
guidelines for the rating system and its conversion into money terms is not just decided
by the HR department, but consensus of cross functional teams is taken into
consideration.
TCS’s performance appraisal system is supported by an online system called the Human
Resource Management System- an Oracle Developer 2000 based tool. This system
maintains entire details (name, age etc and even the project details) of 14000 odd
employees. Right from the time an individual joins TCS, he gets formal performance
feedback from this system every two months till the time he is confirmed. Once a
employee is confirmed, at TCS, he gets feedback from this system twice every year. TCS
also follows the practice of informal discussions between project leaders and team
members regularly.
This entire performance management system at TCS has found an overwhelming appeal
among people.
BIBLIOGRAPHY
1) Managing Human Resources – Bohlander, Snell & Sherman.(12th
Edition)
2) HRM Review.
3) www.tcs.com
4) Organizational Behavior- Stephen P.Robbins (Tenth Edition)
5) www.hr-ucsd.edu
20

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performance apprisal

  • 1. HUMAN RESOURCE MANAGEMENT LIBRARY PROJECT ON PERFORMANCE APPRAISAL MANAGEMENT SUBMITTED BY NAME: ANAND SUBBARAMAN ROLL.NO: 02 CLASS: MMS-I 1
  • 2. TABLE OF CONTENTS CHAPTER NO. TOPIC PAGE NOS. 1 INTRODUCTION 4-5 2 JOB DESCRIPTION & ESSENTIAL FUNCTIONS 6 3 STANDARDS OF PERFORMANCE 7-8 4 OBSERVATION & FEEDBACK 9-10 5 PERFORMANCE APPRAISAL 11-14 6 PERFORMANCE DEVELOPMENT & CONCLUDING REMARKS 15 7 PERFORMANCE APPRAISAL MANAGEMNT SYSTEM AT TCS 16-20 -- BIBLIOGRAPHY 20 OBJECTIVE OF THE PROJECT: 2
  • 3. The main objective of this project is to study the basic difference between performance appraisal & performance management. To study various steps that are involved in the performance management process and also to identify how crucial is performance management system for an organization and its employees to achieve their objectives. PROJECT PLAN : The entire project has been divided into five main topics, which are the steps involved in performance appraisal management process. Towards the end of this report, a live case study of how performance appraisal management system is implemented in TCS is explained. DATA SOURCES : Main source of data is the secondary data, which has been obtained from books on Human Resource Management, HRM Review and other sources. These references are given at the end of this project report. 3
  • 4. CHAPTER-I : INTRODUCTION PERFORMANCE MANAGEMENT : An ongoing communication process that involves both the performance manager and the employee in: 1) Identifying and describing essential job functions and relating them to the mission and goals of the organization. 2) Developing realistic and appropriate performance standards. 3) Giving and receiving feedback about performance. 4) Writing and communicating constructive performance appraisals. 5) Planning education & development opportunities to sustain, improve and build on employee work performance. OVERVIEW OF PERFORMANCE MANAGEMENT: 4 Job Description & Essential Functions. Standards Of Performance. Observation & Feedback. Performance Appraisal Performance Development.
  • 5. The evolution of the concept of performance management as a new Human Resource Management model reflects a change of emphasis in organizations away from command- and-control toward a facilitation model of leadership. This change has been accompanied by recognition of the importance to the employee and the institution of relating work performance to the strategic or long-term and overarching mission of the organization as a whole. The performance management process provides an opportunity for the employee and performance manager to discuss development goals and jointly create a plan for achieving goals. Development plans should contribute towards organizational goals and professional growth of the employee. In today’s globalized economy, wherein many MNC’s are setting up offices in India and offering higher pay packages as compared to Indian companies, performance appraisal & management has become very important and at the same time challenging for the performance managers. Performance managers and their employees are increasingly being asked to become generalists who step outside of traditional narrowly-defined job descriptions in support of team objectives and goals. These changes are resulting in the development of new approaches to human resource management. For performance managers and employees alike, responding to these changes requires the ability to learn, adapt to change, solve problems creatively, and communicate effectively in diverse groups. In addition, employees must take personal and proactive responsibility for their careers to ensure future employability and advancement. The realities of the contemporary workplace will continue to challenge existing paradigms and should be considered in managing the performance of employees in a dynamic working environment. 5
  • 6. CHAPTER-II : JOB DESCRIPTION & ESSENTIAL FUNCTIONS. JOB DESCRIPTION : Before a job vacancy is advertised, a job description is completed. After the employee is hired, this job description becomes the job assignment and forms the basis of the job function description on the Performance Evaluation Form. Writing a job description is a process of systematically collecting, analyzing, and documenting the important facts about a job. This process is called job analysis. The job description provides a basis for job-related selection procedures and performance standards. The job description specifies: 1) The specific job functions & tasks. 2) The skills, knowledge and abilities required to perform the job successfully. 3) The physical & mental requirements of the position. 4) Special conditions of employment. 5) The level of supervision received & exercised. The performance manager should share the job description with the employee during his or her first few days on the job. STRATEGIC PLAN : A strategic plan is composed of a mission statement, identified goals related to the organization's mission, as well as strategic initiatives necessary to accomplish each goal. The mission statement describes the fundamental reason for which an organization or department exists. The goals identify the results, which will further that mission, and strategic initiatives set out the specific steps, which must be taken to achieve those results. Strategic planning is a dynamic process, which is usually revisited at intervals of between one to two years. Individual employees should each make a contribution to realize the goals and should be responsible for accomplishment of specific strategies to support these goals. 6
  • 7. A performance manager should consider the annual goals and strategic initiatives for which the employee is responsible while describing the position, setting standards of work performance, giving feedback about performance, doing the annual performance appraisal, and planning for employee education, training and development. CHAPTER-III : STANDARDS OF PERFORMANCE. DEVELOPING WRITTEN PERFORMANCE STANDARDS: When performance standards are in place, both the performance manager and the employee will know what are the expectations for the performance of essential functions and related tasks. This common understanding provides the basis for ongoing feedback and performance counseling between appraisals as well as for the formal performance appraisal process. DEVELOPING STANDARDS COLLABORATIVELY: There are a number of approaches to developing written performance standards. One is the directive approach in which the performance manager writes the standards, in consultation with management and the employee relation’s representative for his or her department. Then the standards are shared with the employees affected, for their information and to address any questions they may have. Another is a collaborative approach in which performance manager’s work with employees to develop the performance standards for the particular employees position. While it is a legitimate option to develop the standards without employee input, the benefits of a collaborative approach are important. Both the performance manager and the employee bring valuable information to the process and the end result is more likely to be supported by everyone involved. However, the performance manager will make the final decision about the appropriateness of the standards in consultation with management and employee relations’ consultant for a particular position. Mutual agreement with the employee about standards is preferable, but not always possible. Mutual understanding and recognition of the standards is necessary. In the collaborative process of developing standards for a task or function, all employees whose work will be evaluated according to those standards are included. If the task or function is unique to one position, then the employee in that position is included in the development process, and if more than one employee performs the task or 7
  • 8. function, then all the employees whose job description includes that function are involved in the development process. Before setting performance standards for a particular post, the employees in that particular post should be told as to how they are going to be evaluated on the basis of the performance standards set for them. Once the performance standards have been developed, the next step is to write them down on the basis of measurable or verifiable features of the performance. 1) Performance expectations are described in terms of timeliness, cost, quality, quantity, customer satisfaction, independent initiative demonstrated and any other relevant verifiable measure. 2) The acceptable margin of error is specified. 3) Conditions under which the performance is expected to be accomplished or assessed is specified. Once the standards are written down, they are checked on the basis of following points: 1) Whether the standards are realistic. 2) Whether the standards are specific. 3) Whether the standards are based on measurable data. 4) Whether the standards are consistent with organizational goals. 5) Whether the standards are clear and understandable. 8
  • 9. CHAPTER-IV: OBSERVATION & FEEDBACK. OBSERVING EMPLOYEE PERFORMANCE: From the performance management point of view, observation involves noticing specific facts, events, or behaviors related to work performance and the results of work performance. Observations are the raw data upon which effective performance feedback may be based. The purpose of observing employee behavior and the results of work performance is to identify and describe it in order to help the employee be successful and continue to develop his or her skills, knowledge, and experience. By observing the employee performance, the performance manager will be able to gather additional information to make both praise and constructive feedback both highly effective. Observations should be the basis for feedback, and may also suggest actions, which might be taken to support, develop or improve performance. Feedback based on observed or verifiable data is more likely to influence employee behavior than feedback, which cannot be supported by firsthand information. In situations when the performance manager is not present to observe employees at work, then the performance manager should make sure that there are processes in place through which he can learn about how the employee is performing his duties/responsibilities. The processes, which will be in place, should be fair, open & understood by everyone. Even if the processes are in place to evaluate employee performance, it should not limit the performance manager from practicing the following: 1) Evaluation of output & products of employees work. 2) Having routine one-to-one meetings with employees and this should include discussions of performance. 3) Periodical review of standards of performance of employees. 4) Getting feedback from customers. 5) Performing routine spot checks of the employee at work. 9
  • 10. 6) Getting feedback of employees’ performance from his peers. BEHAVIORAL FEEDBACK: Feedback may be defined as "information about past behavior, delivered in the present, which may influence future behavior." Feedback is influential. During the performance appraisal period, the performance manager must give feedback about employee’s performance regularly. When employees receive feedback that is timely, frequent and specific they are more likely to understand what is expected of them, to repeat successful performance and to improve their work when necessary. Feedback, which describes observed or verifiable behavior and facts, is different from feedback, which evaluates the person based on assumptions, interpretations, generalizations, and judgments about what the behavior or facts mean. Behavioral feedback consists of statements about observed or verified behavior related to performance standards. If the employee does not understand what is expected out of him, then the performance manager should make it clear as to what is expected out of him. Following points should be remembered while giving behavioral feedback to employees: 1) Behavioral feedback should be based on specific, observable or verifiable, data and information, and should be delivered as close to the event or behavior as possible. 2) After describing the observations to the employee, the performance manager should give a chance to the employee to give his inputs. 3) The performance manager should never give threats or promises of promotion to his employees. The behavioral approach to feedback is valuable when describing performance, which needs to be improved, because the employee learns which specific behaviors to change rather than receiving general comments, which don't give much information. Merely by giving a positive/negative feedback to the employee, wont be sufficient for the employee to perform better. The employee must know exactly in which areas he should improve. This can be done through a process called performance appraisal, which is discussed in the next chapter. 10
  • 11. CHAPTER-V: PERFORMANCE APPRAISAL. PERFORMANCE APPRAISAL: Definition: Performance appraisal is a process of assessing, summarizing and developing the work performance of an employee. Performance appraisal can be broadly used for two purposes as explained below: 1) Administrative Purposes: From the administration point of view, appraisal programs provide input that can be used for the entire range of HRM activities. Performance appraisal is directly related to a number of major HR functions like promotions, transfer and lay-off decisions. Performance appraisal data may also be used in HR planning, in determining the relative worth of jobs under a job evaluation program, and as criteria for validating selection tests. Finally, it is important to recognize that the success of the entire HR program depends on knowing how the performance of employees compares with the goals established for them. 2) Developmental Purposes: From the individual development point of view, appraisal provides feedback essential for discussing strengths, weaknesses as well as improving performance. Regardless of the employee’s level of performance, the appraisal process provides an opportunity to identify issues for discussion, eliminate any potential problems and set new goals for achieving high performance. 11
  • 12. We have already looked at the purposes for which performance appraisal needs to be done. Now let us look at who are all involved in appraising performance of an employee in an organization. 1) Manager/Supervisor Appraisal : In this type, performance appraisal is done by the employee’s manager and is reviewed by a manager one level higher. This has been the traditional approach to evaluate employee’s performance. 2) Self-Appraisal : In this type, performance appraisal is done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview. This type of appraisal is beneficial when managers seek to increase an employee’s involvement in the review process. This approach also works well when the manager and the employee jointly establish future performance goals or employee development plans. 3) Subordinate Appraisal: In this type, performance appraisal of a superior is done by an employee, which is more appropriate for developmental than for administrative purposes. Since subordinate appraisals give employees power over their bosses, the managers themselves may be hesitant to endorse such a system, particularly when it might be used as a basis for compensation decisions. 4) Peer Appraisal: In this type, performance appraisal is done by one’s fellow employees, generally on forms that are compiled into a single profile for use in the performance interview conducted by the employee’s manager. Employers using peer appraisals must be sure to safeguard confidentiality in handling the review forms. Any breach of confidentiality can create interpersonal rivalries or hurt feelings and bring about hostility among fellow employees. 5) Team Appraisal: This type of performance appraisal is based on TQM concepts that recognizes team accomplishment rather than individual performance. This can be called as an extension of peer appraisal. 6) Customer Appraisal: This type of performance appraisal is also based on TQM concepts and seeks evaluation from both external and internal sources. 7) 360 degree Appraisal: 360 degree feedback is intended to provide employees with as accurate a view of their performance as possible by getting input from all angles: supervisors, peers, subordinates and customers. This type of appraisal was purely developmental and restricted mainly to management and career development, but now this type of appraisal is also used to assess the performance of employees in an organization. While implementing 360 degrees performance appraisal, organizations should take note of the following points: (i) Assure anonymity. (ii) Make respondents accountable. (iii) Prevent gaming of the system. (iv) Use statistical procedures. (v) Identify and quantify biases. 12
  • 13. 360-degree feedback can provide a valuable approach to performance appraisal, but its success depends on how managers use the information and how fairly employees are treated. PERFORMANCE APPRAISAL METHODS: Performance appraisal methods can be broadly classified as measuring traits, behaviors or results. Trait approaches continue to be the more popular systems despite their inherent subjectivity. Behavioral approaches provide more action-oriented information to employees and therefore may be best for development. The results oriented approach is gaining popularity because it focuses on the measurable contributions that employees make to the organization. Let us look at each type of performance appraisal method in detail. 1) Trait Method: Trait approaches to performance appraisal are designed to measure the extent to which an employee possesses certain characteristics such as dependability, creativity, initiative and leadership. Trait approaches are popular because of the ease with which they are developed. Following are some of the scales, which are used in trait method. (i) Graphic Rating Scale: This is a trait approach to performance appraisal whereby each employee is rated according to a scale of characteristics. (ii) Mixed-Standard Scale: This is a trait approach to performance appraisal similar to other scale methods but based on comparison with better than, equal to, or worse than a standard. (iii) Forced-Choice Method: This is a trait approach to performance appraisal that requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance. (iv) Essay Method: This is a trait approach to performance appraisal that requires the rater to compose a statement describing employee behavior. 2) Behavioral Method: One of the potential drawbacks of trait-oriented performance appraisal is that traits tend to be vague and subjective. To overcome this, behavior methods have been developed to specifically describe which actions should be exhibited on the job. They are frequently more useful for providing employees with developmental feedback. Following are some of the behavioral methods: (i) Critical Incident Method: It is an unusual event that denotes superior or inferior performance in some part of the job. (ii) Behavioral Checklist Method: This method consists of having the rater check those statements on a list that the rater believes are characteristic of the employee’s performance or behavior. This is one of the oldest appraisal technique. 13
  • 14. (iii) Behaviorally Anchored Rating Scale: This method of performance appraisal consists of a series of vertical scales, one for each important dimension of job performance. (iv) Behavior Observation Scale: This method of performance appraisal measures the frequency of observed behavior. 3) Results Method: Rather than looking at the traits of employees or the behaviors they exhibit on the job, many organizations evaluate employee accomplishments. Advocates of this method argue that looking at the sales figures, production output and the like involves less subjectivity and therefore may be less open to bias. Following are some of the ways by which results method is implemented: (i) Productivity Measures: There are a number of results measures available to evaluate performance. Sales people are evaluated on the basis of their sales volume. Production workers are evaluated on the basis of he number of units they produce and perhaps the scrap rate or number of defects that are detected. Each of these measures directly links what employees accomplish and results that benefit the organization. In this way, result appraisals can directly align employee and organizational goals. (ii) Management by Objectives: This is a philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager. STEPS FOR PERFORMANCE APPRAISAL: 1) Preparing: Typically performance appraisal for career employees is due one year from the end of the probationary period or before the merit cycle. The preparation process involves review and data gathering, holding a preliminary meeting with the employee, and employee preparation of a self-appraisal. 2) Writing: The writing phase of the performance appraisal process involves completing the form for the Performance Appraisal Models used by the organization, and writing the supporting comments. 3) Delivering: Planning the performance appraisal meeting contributes to the success of the process. Following points should be kept in mind before calling any employee for a performance appraisal meeting: (i) Prior to the meeting, the written appraisal of employee’s performance must be reviewed. (ii) In the performance appraisal meeting, only the appraiser and the employee who is being apprised must be present. (iii) If there is any difference of opinion, it must be clarified during the meeting. (iv) The appraiser must show interest in the employee’s progress. 4) Producing: A copy of final signed performance appraisal should be given to the employee for his or her records. The performance appraisal process is intended to breakdown barriers and maintain open communication, creating an atmosphere that allows a candid approach to discussions of performance. 14
  • 15. During the new review period, the performance manager and employee discuss the employee’s on an ongoing basis until it is time for the next written appraisal. This communication is part of the ongoing process of observation and feedback. Once the performance of the employee is appraised, the next logical step is to see to it that the employee improves his performance every time. To ensure that this happens in an organization, a proper performance development plan should be drawn up. We will look at performance development in the next chapter. CHAPTER-VI: PERFORMANCE DEVELOPMENT CONTINUOUS LEARNING: Development of employee skills, knowledge and experience is essential in today's rapidly changing workplace. In order for the organization to remain competitive and to retain its reputation for excellence, employees should have up-to-the-minute information and the ability to use new technologies, adapt to organizational change, work in flatter organizations in which cross-functional skills and knowledge are required, and work effectively in teams and other collaborative situations. Employees, too, recognize that it is essential for them to continue to learn so that they will be effective in their current jobs and able to move into other positions or accept new responsibilities as circumstances demand. PREPARING THE PERFORMANCE DEVELOPMENT PLAN: There are four principal occasions when preparation of a performance development plan might be considered: 1) After definition or review of performance standards. 2) As a part of the ongoing process of observation and feedback. 3) As the final element of the performance appraisal process. 4) When an employee initiates a request for education or development opportunities. 15
  • 16. At any of these points in the performance management process, the performance manager may discuss training, education or development opportunities with his/her employee. CONSIDERATIONS: Performance development plans should be considered with the needs of the organization and the needs of the employee in mind. Before deciding upon the development plan for a employee, the organization/department should assess its future goals and objectives, so that the development plan of the employee can be designed accordingly. CONCLUDING REMARKS: Many say that intrinsic motivation and not rewards is the important factor for an individual to enjoy his/her job. But after having discussed about performance appraisal management, we can say that intrinsic motivation, although important, may not work over a long run, because an employee will be satisfied only when he is appreciated by his superior for a job well done and rewarded accordingly. So it is important that for an organization to grow, it has a proper performance appraisal management system in place. CHAPTER-VII: PERFORMANCE APPRAISAL MANAGEMENT SYSTEM AT TCS. OVERVIEW OF TCS: Tata Consultancy Services Limited (TCS) commenced operations in 1968, when the IT services industry didn’t exist as it does today. Now, with a presence in 32 countries across 5 continents, & a comprehensive range of services across diverse industries, TCS is one of the world's leading Information Technology companies. Six of the Fortune Top 10 companies are among TCS’s valued customers. Tata Consultancy Services Limited (TCS) is the world-leading information technology consulting, services, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. Tata Consultancy Services Limited (TCS) is part of one of Asia's largest conglomerates - the TATA Group - which, with its interests in Energy, Telecommunications, Financial Services, Chemicals, Engineering & Materials, provides TCS with a grounded understanding of specific business challenges facing global companies. Tata Consultancy Services Limited (TCS) is engaged in the following service practices: 1) Application Development & Maintenance. 2) Architecture & Technology Consulting. 16
  • 17. 3) BPO 4) E-business. 5) Engineering & Industrial services. 6) E-security. 7) IT infrastructure services. 8) Large Projects. 9) Process solutions. 10) RFID Solutions. Tata Consultancy Services Limited (TCS) caters to industries like banking, financial services, insurance, telecom, manufacturing, media, retail, transportation etc. HR PRACTICES @ TCS: The TCS-HR group operates with technical experts to create a synergy, which is enviable. HR plays the role of facilitator at TCS as shown in the figure (next page). So whether it is recruitment or even career development, HR is the catalyst, which initiates and institutionalizes processes. To manage all the functions for over 14000 employees is a Herculean task but the smoothness of operations is intriguing. The HR structure, which allows flexibility and empowerment, is the solution. 17 Performance Discussions and Performance Management for all at a center. The Center Manager GL’s/TL’s Recruitment Training (Technical/Behavioral) Career Development/Monitoring. Allocation to Projects. (Domestic/Overseas)
  • 18. The HR head of each region at TCS has sufficient degree of authority to carry out relevant functions and yet the corporate is easily accessible for advice and guidance. Such a structure promotes sharing of best practices across the regions and the institutionalization of the best across the regions. RECRUITMENT: TCS believes in the strength of human resources, and focuses predominantly on the recruitment function. A sound recruitment process translates into a sound foundation for the organization. In the dynamic software industry, with the demand far outgrowing the supply, it is the quality of people and workforce practices that are the deciding factors for any organization's success. With process orientation so intricately woven into the HR practices, system thinking is the key for the design of all design of all workforce practices at TCS. TCS follows a simplified "Waterfall Recruitment Process" to recruit world-class talent. While TCS has a very sound recruitment process starting from accrediting institutes to training on interview techniques. The accreditation process includes a list of parameter that must be met. These include library facilities, standard of entrance tests, number of full time faculty, number of computers vis-à-vis number of students, among others. The accreditation is done and short listed by software, which has the requisite checklist. The HR group has been accustomed to using technology so that objectivity is maintained and so is accuracy of data. The Waterfall recruitment process is shown below: 18 Recruitment Detailed Design & Plan Cultivate Resource Selection Test/Interview OfferInductIntegrate InfoTrainDeploy
  • 19. TRAINING: TCS has the best training facilities for its employees. The HR group at TCS plays a vital role in grooming the new recruits and helping them understand the culture at TCS. At the TCS Training Center in Trivandrum, the HR officers strike an immediate rapport with the young new entrants and orient them into the professional phase of their life. Focusing on team building, competitive presentation skill and grooming, the HR professional takes the new entrant through what are called as Life Skills. There are dedicated HR resources (Life Guards) provided for every batch at the center to guide and help new entrants in their transition phase form students to IT professionals. And they are there with the batch through all its highs and lows through the 72-day long training programme, providing individual assistance when required helping the new entrants tide over the new demands of professional life. RETAINING THE BEST TALENT: In an era where company loyalty is on the decline, and demand for skilled software resources is so devastatingly high, TCS's strength lies in retaining and developing its employees. Its low attrition rate while surprising is also expectable. TCS constantly reviews its HR policies because often these decide whether an employee will stay or choose to leave. 19
  • 20. In TCS, the stress is on identifying the competencies required for a role and then filling the positions. And it is here that the Manpower Allocation Task Committee (MATC) in TCS has a predominant role to play. TCS has a career path for Technical persons, for managers and for Research Scientists and here again the HR group facilities the entire process through a thorough competency matching. This is done by a function unique to TCS called the MATC- Manpower Allocation Task Committee. MATC is aided by a system that assists in identifying not just competencies for a role but also the level of competency required to fit. The committee is responsible for the allocation of every individual to projects depending on the set of competencies and the level of capability in these competencies. These could be a projects in India or overseas. The Career Paths have been designed by the Consultancy experts and necessary qualities (both behavioral and technical) required, have been used as inputs. PERFORMANCE APPRAISAL MANAGEMENT: TCS’ performance management system emphasizes objectivity and mandates performance evaluation against predetermined criteria. Senior management at TCS is actively involved in determining guidelines for performance appraisal process. The guidelines for the rating system and its conversion into money terms is not just decided by the HR department, but consensus of cross functional teams is taken into consideration. TCS’s performance appraisal system is supported by an online system called the Human Resource Management System- an Oracle Developer 2000 based tool. This system maintains entire details (name, age etc and even the project details) of 14000 odd employees. Right from the time an individual joins TCS, he gets formal performance feedback from this system every two months till the time he is confirmed. Once a employee is confirmed, at TCS, he gets feedback from this system twice every year. TCS also follows the practice of informal discussions between project leaders and team members regularly. This entire performance management system at TCS has found an overwhelming appeal among people. BIBLIOGRAPHY 1) Managing Human Resources – Bohlander, Snell & Sherman.(12th Edition) 2) HRM Review. 3) www.tcs.com 4) Organizational Behavior- Stephen P.Robbins (Tenth Edition) 5) www.hr-ucsd.edu 20